Irish Bank Provisions Rise to Speed Loan Restructures, IMF Says
2013-12-19 16:00:00.7 GMT
By Joe Brennan
Dec. 19 (Bloomberg) – Irish central bank pressure on the nation’s bailed-out lenders to increase loan-loss provisions after assessing their balance sheets will speed up the restructuring of distressed loans, according to the International Monetary Fund.
- The central bank finds it “appropriate” that banks book a
“significant increase in provisioning,” the IMF says in
12th report of Ireland’s bailout program- Says increase largely reflects collateral valuations and
fact that central bank is pressing banks to initially
still classify restructured loans as impaired assets - Says some banks may need to increase their risk-weighted
asset levels
- Says increase largely reflects collateral valuations and
- Says while banks currently don’t need more capital, with
14.1% end-June average core Tier 1 ratios above 10.5%
regulatory minimum, this doesn’t exclude potential for
capital needs after ECB stress tests next year - Says ability to forecast banks’ profits is impacted by their
inability to assess revenue contributions from non-
performing, modified and forborne loans “as the banks
continue to accrue and capitalize an unspecified amount of
interest income that is not actually paid”