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Mar 19 2020, 08:45 GMT
Banks
Weighing up the impact of COVID-19
- Sectors : Banks
- Companies : permanent tsb Group | AIB Group | Bank of Ireland
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| AIB Group | OUTPERFORM | 23/01/19 | Neutral | 14/08/18 | 101c |
| Bank of Ireland | OUTPERFORM | 11/03/13 | Neutral | 14/08/12 | 184c |
| permanent tsb Group | NEUTRAL | 06/03/19 | Outperform | 01/08/18 | 45.0c |
DAVY VIEW
Bank share prices continue to move lower as concern regarding COVID-19 mounts. Unlike the financial crisis, banks aren’t the architects of the current crisis. As such, solvency is much stronger and liquidity levels are high following prolonged multi-year deleveraging. That said, banks are highly sensitive to macro-economic shocks – further exacerbated by IFRS 9 credit-loss modelling and the regulatory priority to reduce non-performing exposures (NPEs). Our analysis highlights that the market has priced in an abrupt shift to assume stress-test levels of credit losses rather than a V-shaped recovery.
