AIB, Anglo Irish Bank and Bank of Ireland have been rated “underweight” in new coverage by JPMorgan Chase & Co, which said there is a “lack of earnings visibility'' at the Irish lenders.
AIB, Ireland's largest lender by market value, was given a share price estimate of €8.50, JPMorgan analysts Ignacio Cerezo and Andrea Unzueta in London said in a note to clients today.
Anglo Irish and Bank of Ireland were given a share price estimate of €5.90 and €4.30, respectively.
JPMorgan "expect low single digit loan volumes, margin compression due to higher funding costs, slow mortgage re-pricing," the note said.
"We give banks credit for cost control policies, but see efforts there outweighed by revenue pressures."
Irish bank shares have fallen around 44 per cent this year, extending a 35 per cent drop in 2007, as property prices tumbled and lending growth slowed.
Ireland may enter a recession this year for the first time in more than two decades, the Economic and Social Research Institute has said.
Bloomberg