Moody’s: Los varios caminos de la recuperación para los bancos en España, Irlanda, Italia y Portugal

Alberto Postigo, VP-Senior Credit Officer en Moody’s - Miercoles, 20 de Agosto

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There will be different paths to recovery for banks in Ireland (Baa1 stable), Italy (Baa2 stable), Portugal (Ba1 stable) and Spain (Baa2 positive), following the improvements in the operating environments in these countries, says Moody's Investors Service.

The special comment, "European Banks: Different Paths to Recovery for Irish, Spanish, Italian and Portuguese Banks", is now available on http://www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release.

Moody's says that Irish banks' asset quality will improve, and that the pace of asset-quality erosion will slow in the portfolios of banks in Italy, Portugal and Spain. However, capital raising and consolidation efforts will not completely mitigate the banks' asset-quality challenges, and solvency ratios will stay weaker than those in other European countries. Pressure on profitability will persist in Italy, Portugal and Spain, but improve in Ireland, whilst tight funding conditions and bank reliance on ECB funds will ease.

The recovery trajectories of these four banking systems start from very different levels in terms of credit fundamentals (efficiency, asset quality, capital, liquidity and net profits). For example, Moody's highlights that home-grown real-estate bubbles in Ireland and Spain meant that asset-quality deterioration was far more pronounced in these banking systems. In both cases, the banks had to be recapitalised using taxpayer funds and the bail-in of junior creditors, in addition to private means in Spain. The Italian system did not suffer the same degree of asset-quality erosion or the need for tax-payer and creditor-funded recapitalisations. In Portugal, banking recapitalisation followed the EBA's stress test and was funded using public-sector funds and private resources.

Moody's says that Irish banks have the potential to show the most notable improvement over the remainder of 2014 and through 2015, albeit from the lowest starting point. This is because comparatively higher economic growth in Ireland ought to offer some boost to these banks' bottom line and improve the performance of asset portfolios via rising borrower debt-service capability. Spanish banks should also perform better over this period as problem loan formation slows and credit costs ease. In Italy, where economic growth is more sluggish, as well as in Portugal, banks' internal capital generation is likely to remain more subdued for a longer period of time.

 

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