Bank of Ireland and Anglo Irish Bank fell on Dublin trading today after they were downgraded to “sell” by Citigroup today on concerns that credit quality in their main markets will deteriorate.
Bank of Ireland dropped 5.6 per cent to €7.08, while Anglo Irish Bank Plc tumbled 5 per cent to €7.47.
"With its business model focused on secured commercial real estate lending, it is not a great surprise that Anglo Irish bank is most exposed with 80 per cent of its loan book secured against UK or Irish property,'' Citigroup analysts wrote in a research note today.
Bank of Ireland is also "highly exposed", with 71 per cent of loans secured against commercial property and residential mortgages, Citigroup said.
In a separate note today, Christoph Bossman, an analyst at WestLB in Dusseldorf, lowered his share- price estimate on Bank of Ireland to €11 from €13.50. WestLB retained its "buy" rating on the stock.
Citigroup cut its 2009 earnings per share estimates for Bank of Ireland by 31 per cent to 108.6 cent and by 18 per cent for Anglo Irish to 121.2 cent.
It previously had "hold" ratings on both lenders.
Bloomberg