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Royal Bank Of Scotland's Irish Loan Losses Double To £15Bn After Stress Tests, Says Ubs

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The part-nationalised bank has so far put aside £6bn to cover the losses it expects to make on its Irish portfolio. However, UBS analysts estimate RBS would need to raise this to £15bn using the loss assumptions Blackrock applied to Irish banks.

In contrast, Lloyds Banking Group would need to increase its provisions by just £200m to £8bn, according to UBS.

On Thursday, Ireland's central bank revealed the country's four main banks will have to raise an additional €24bn (£21bn) in capital following stress tests designed to repair market confidence in the country's shattered financial system.

The tests uncovered the level of loan losses Allied Irish Bank, Bank of Ireland, Irish Life & Permanent and the EBS Building Society would face in a scenario where property prices continue to fall and economic growth remains weak.

The European Central Bank and International Monetary Fund, which last year provided Ireland with a €85bn bail-out, welcomed the announcements by the Irish government. The ECB said it would suspend the BBB– rating threshold for the eligibility of collateral for the Eurosystem credit operations for all debt instruments issued or guaranteed by the Irish government.

Once more RBS proves what a good buy it was for the UK taxpayer.

Although is the ECB comment meaning that the ECB will accept Irish collateral that's rated at less than BBB-? Does that mean it will accept any quality debt from the Irish govt?

Still it looks like the problem is finally contained.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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