Ireland’s Banking Industry Country Risk Assessment was downgraded by Standard & Poor’s to Group 3 from Group 2 on concern that the nationalization of Anglo Irish Bank Corp. damaged the reputation of the nation’s lenders.
The government’s seizure of Anglo Irish in January has “weakened investor confidence,” S&P said in a statement today.
The Dublin-based bank is under investigation by Irish police and the country’s financial watchdog after it emerged in December that former Chairman Sean Fitzpatrick didn’t fully disclose loans he had from the bank. Deposit transfers between Anglo and Irish Life & Permanent Plc are also being probed.
“The timing of these revelations is harmful to the strength of the banking system overall, coming at a point when investor confidence is already low,” the New York-based ratings company said.