Businesses and banks in Ireland are reporting the best and worst times for banking activity over the next six months, as the European Central Bank prepares to launch its first quantitative easing program.
The central bank will start buying €1 trillion worth of bonds and mortgage-backed securities this month, and it is expected to sell €3 trillion in mortgage-linked bonds over the same period.
However, as well as being the best time for banking to open, the worst time is likely to be in the middle of the month, with banks closing down for the winter months.
There are three major banks that have reported worst-case outcomes for this period: the Bank of Ireland, Ulster Bank and the Irish National Bank.
Read more about the banks’ business outlook here.
The Ulster Bank announced its worst-ever quarterly results on Tuesday, with its losses in the last quarter of 2016 rising to €1.7 billion.
It also reported a €5.9 billion loss in the third quarter of this year, up from a €2.7 million loss in 2015.
In contrast, the Bank Of Ireland reported a loss of €4.9 million in the fourth quarter of last year, compared to a loss in 2016 of €2 million.
All three banks have been forced to suspend operations since the Brexit vote in the UK in June.
“The uncertainty surrounding the UK referendum result has had a profound effect on the financial sector, and has affected the availability of credit, as businesses and households are now looking at a range of options,” said Ian Murray, chief executive of the Irish Bankers Association.
“[The Irish Bank] expects that it will be in a better position than most in the near future to continue providing services and products to its customers and customers are looking for alternative sources of credit.”
The Irish National is facing a similar challenge.
Its latest quarterly results showed a €9.2 million loss.
While it is unlikely that the bank will go bust any time soon, it could face more turbulence in the next year, as banks around the world have already started to cut back on their lending.
The Bank of England has warned that the UK economy is set to grow by 0.6% in the year to December, a figure that will be the lowest level since the 2008-2009 financial crisis.
A spokesperson for the Irish Central Bank, which is also the Irish government’s central bank, told The Irish Post that the Irish economy is likely “to continue to strengthen in the coming months”.
Read the full story here.
This article was amended on 22 January 2017 to clarify that the Ulster Bank reported losses in 2016.