IRISH BANK shares enjoyed a bounce yesterday as financial stocks rose 10 per cent, boosted by better than expected earnings at US banks and significantly lower oil prices. This helped to ease concerns about loans losses and the slowing economies, and enticed investors back into the markets.
The country's largest bank, AIB, performed best, enjoying its best one-day gain since May 1989. The stock added 12.6 per cent to its value, closing at €8.20. It was followed by Bank of Ireland, which gained 10.2 per cent to €5.39, its biggest one-day gain in 21 years.
Anglo Irish Bank and Irish Life Permanent (ILP) both jumped 8.7 per cent. Anglo ended the day at €4.75 and ILP at €8.7 per cent.
Anna Lalor, analyst at Goodbody Stockbrokers, said: "It's a bit of a welcome respite but stock markets are still so volatile, so I would not get too hopeful. We still have a lot of uncertainty in the credit cycle and we have not yet seen how the economic slowdown is affecting the Irish banks."
Sebastian Orsi, analyst at Merrion Capital, said: "Bank stocks have been beaten up the most, but they are have bounced back quite well. They are big moves on the day, but they are still only back to where they were last week."
Bank of Ireland said it had raised $400 million (€253 million) in a private placement of term funding in an extendable three-year note with a US investor.
The placement was priced slightly higher than a similar placement by the bank last March.
A spokesman for the bank's treasury operation said: "The note demonstrates that the bank has good access to the debt capital markets at present."
A spokesman for Irish Life Permanent confirmed that it had raised €2 billion of the €3 billion in term funding due to mature this autumn, and that it was "well advanced" on securing the last €1 billion by the end of this month.
Taoiseach Brian Cowen came out in support of the Irish banks in New York on Wednesday, saying they were "very well capitalised" and that they did not need support from the Government. US banks reported one of their biggest rebounds, with the SP regional banks index gaining 22.8 per cent.
