Fitch affirms Irish banks

Fitch Ratings said it affirmed Allied Irish Banks plc and Bank of Ireland's BBB long-term issuer default ratings and F2 short-term issuer default ratings, BBB senior notes and F2 short-term debt ratings and removed them from Rating Watch negative.

Fitch also affirmed and removed from Rating Watch negative EBS Building Society's BBB- long-term issuer default rating, F3 short-term issuer default rating, BBB- senior notes and F3 short-term debt.

Allied's C lower and upper tier two subordinated notes and tier one notes, Bank of Ireland's C upper tier two subordinated notes, preferred shares and subordinated debt and EBS' C preferred shares are unchanged. The outlooks on Allied, EBS and Bank of Ireland are negative.

The agency has also maintained Anglo Irish Bank Corp. and Irish Nationwide Building Society's BB- long-term and B short-term issuer default ratings and BB- senior notes on Rating Watch negative. The ratings of Allied, Anglo, Bank of Ireland, EBS and Irish Nationwide's government-guaranteed liabilities have been affirmed at BBB+/F2 and removed from Rating Watch negative.

Anglo's B short-term debt was also maintained on Rating Watch negative.

The rating actions follow the affirmation of the Irish sovereign's BBB+ rating and assignment of a negative outlook, the agency said.

The affirmation of Allied, Bank of Ireland and EBS' ratings reflects their systemic importance as well as government commitments to recapitalize these institutions following the results of the Prudential Capital Assessment Review and Prudential Liquidity Assessment Review announced at end-March, the agency added.

The negative outlook on Allied, Bank of Ireland and EBS' long-term issuer default ratings reflects the macro-economic downside risks that drive the negative outlook on the sovereign rating, Fitch said. These risks primarily reflect concerns regarding the timing and pace of economic recovery.

The Rating Watch negative on Anglo and Irish Nationwide's ratings continues to reflect the uncertainty associated with their asset quality and wind-down status.

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