STOCK MARKET:THE FALLING share prices of Irish banks are having an impact on pension funds, Richie Boucher, chief executive of Bank of Ireland's retail financial services, said yesterday.
He also told the Oireachtas Committee on Finance and the Public Service that many well-managed and strongly-performing companies which have little exposure to Ireland in terms of the volume of business they do here are "suffering from the Irish pain".
He cited building materials company CRH as an example, saying that only 6 per cent of its turnover is accounted for by its Irish business, yet its share price was under pressure. "All share prices bar mining and commodities have gone down, and that is feeding through to pensions."
The managing director of AIB, Donal Forde, said it was wrong to suggest that the fall in Irish bank share prices was only an Irish story. "Irish bank share prices fell 40 per cent over the past year, but bank shares in the UK have fallen by 45-70 per cent. It is an international phenomenon."
The fall in share prices has prompted speculation that Irish banks may yet be forced to resort to rights issues and seek more cash from shareholders to shore up their funding positions.
"We are well-capitalised and there will be no rights issue by our bank," said Willie McAteer, group finance director of Anglo Irish Bank.
The committee was told that arrears, bad debts and repossessions by Irish banks were low by international standards. Chief executive of the Irish Banking Federation Pat Farrell said there were 50 repossessions last year and there was no appreciable increase on that figure in the year to date.