Ireland`s banks face losses of as much as 35-billion euros (US$49-billion) through next year as the economy shrinks at an "unprecedented" pace, the International Monetary Fund said.
Gross domestic product will shrink a cumulative 13.5% in the three years through 2010 as the bursting of a decade-long property boom ripples through the economy, the Washington-based lender said in a report late on Wednesday. The losses envisaged are bigger than those forecast by the biggest Irish securities firms.
Bank of Ireland PLC and Allied Irish Banks PLC have the biggest share of bad debts and will probably account for more than half of loans due to go into a proposed bad bank, known as the National Asset Management Agency. Finance Minister Brian Lenihan has said the agency will purchase as much as 90-billion euros in souring property loans.
"The assessment of the bad debt outlook is at the top end of estimates for cumulative losses," Kevin McConnell, head of research at Bloxham Stockbrokers in Dublin, said in a note today. "Much will depend on the working of NAMA, the haircut applied to the bad assets and the level of international recovery seen over the next 18 months."
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Gross domestic product will shrink a cumulative 13.5% in the three years through 2010 as the bursting of a decade-long property boom ripples through the economy, the Washington-based lender said in a report late on Wednesday. The losses envisaged are bigger than those forecast by the biggest Irish securities firms.
Bank of Ireland PLC and Allied Irish Banks PLC have the biggest share of bad debts and will probably account for more than half of loans due to go into a proposed bad bank, known as the National Asset Management Agency. Finance Minister Brian Lenihan has said the agency will purchase as much as 90-billion euros in souring property loans.
"The assessment of the bad debt outlook is at the top end of estimates for cumulative losses," Kevin McConnell, head of research at Bloxham Stockbrokers in Dublin, said in a note today. "Much will depend on the working of NAMA, the haircut applied to the bad assets and the level of international recovery seen over the next 18 months."
Read the full article here.