Moody's to review bank ratings

Ratings agency Moody's said today it had placed some Irish bank ratings under review.

The agency placed the short-term bank deposit and debt ratings of Bank of Ireland, EBS Building Society, and Irish Life & Permanent on review for possible downgrade.

The dated subordinated debt of EBS, the long-term bank deposit rating of Bank of Ireland (UK) and AIB's dated subordinated debt, junior subordinated debt, cumulative Tier 1 securities and non-cumulative preference shares are also facing downgrade.

Moody's said it took the decision to do so because a multi-notch downgrade of the Irish sovereign is "the most likely outcome" of the on-going review of the sovereign rating.

"The review for possible downgrade of the short-term bank deposit and debt ratings of Bank of Ireland, EBS Building Society, and Irish Life & Permanent reflects Moody's view that a multi-notch downgrade of the sovereign rating, which would leave the rating of the Republic still within the investment-grade category, is now the most likely outcome of our current review of the Aa2 sovereign credit rating," the agency said.

"As a result, the final rating outcome of the long-term and short-term bank deposit and senior debt ratings of these banks, whose ratings incorporate a very high level of systemic support, could now be lower than originally envisaged, potentially leading to lower short-term ratings."