AIB shares fell up to 14 per cent this morning amid continued concern over the slow progress through the Dáil of the Government's €54 billion "bad bank" scheme.
AIB traded 23 cents lower at €1.64 at 10.34am, the biggest decline in the 63-member Bloomberg Europe Banks and Financial Services Index. At 2pm this afternoon, the bank's shares were down some 10 per cent at €1.677.
Bank of Ireland, which is also transferring assets to Nama, fell 2.8 per cent earlier today and by 2pm was at 1.65, down 2.94 per cent.
Elsewhere, Ryanair fell in Dublin trading this morning after the company said it would cut average ticket prices further to lure passengers. The carrier is forecasting that yields, a measure of ticket prices, will fall as much as 20 per cent in the winter season. The stock dropped as much as 9.2 per cent.
Aer Lingus dropped as much as 8.8 per cent this morning. The stock fell as much as 5 cents to 52 cents and traded at that level as of 12.15pm.
'It's the same old story of the dragging on of the Nama (debate) and the weakness of the Irish economy,' a Dublin-based trader said, referring to bank stocks.
On October 29th, AIB chairman Dan O’Connor said the bank could face “serious consequences” from its negotiations with Europe. The bank has already received €3.5 billion from the Government.
“The threat of more significant EC requirements” may make it more difficult for Bank of Ireland and Allied Irish “to raise equity until there is further clarity on the ultimate outcome of its decisions,” Anna Lalor, analyst at Goodbody Stockbrokers in Dublin, wrote in note today.
The Government expects a law to establish the National Asset Management agency to be passed by the Dáil on November 12th, Department of Finance sources have said.
The recent fall in Irish bank shares has been attributed to the Bill’s slow progress through the Oireachtas. Committee stage was completed last week after a marathon debate.
The report stage of the Bill is to be taken in the Dáil next Wednesday and Thursday. It is due to to be debated in the Seanad on November 9th, 10th and 11th, where further amendments are likely to be tabled. The final stage in the Dáil is scheduled for the following day, November 12th.
Once it has passed all stages, the Bill will be sent to Áras an Uachtaráin for the President’s signature. However, there is speculation she may decide to refer the legislation to the Supreme Court to test its constitutionality.
Additional reporting Reuters