RE: SP28 Mar 2018 12:43
Form Davy morning note
Irish banks
Finance Minister diffuses DTA concerns; BOI added to Conviction List and raising AIB to �Outperform�
Stephen Lyons | Morning briefing | Read Important Disclosures
Bank of Ireland (BOI) and AIB have underperformed during March, falling by 11% and 13% respectively versus a fall of 7% for the European banking sector. We attribute this underperformance to domestic political concerns regarding non-performing loan (NPL) sales and deferred tax assets (DTAs). We believe that both concerns are overdone, which is supported by the Finance Minister�s comments that he has no intention of changing the treatment of tax losses. With 30% upside to our �8.90 target price, BOI has been added to the Davy Conviction List. For AIB, with 20% upside to our �5.65 target price, we move our rating to �Outperform� from �Neutral�.