S&P cuts Irish banks

Standard & Poor's said it lowered the counterparty credit ratings on Anglo Irish Bank Corp. to B-/C from B/B, Allied Irish Banks plc to BB/B from BBB/A-2 and its subsidiary AIB Group (UK) plc to BB-/B from BBB-/A-3, Bank of Ireland to BB+/B from BBB+/A-2 and Irish Life & Permanent plc to BBB-/A-3 from BBB/A-2.

The downgrades follow a review of S&P's Banking Industry Country Risk Assessment on Ireland, a review of the extraordinary support factored into the ratings on the banks from Ireland (A-/Watch negative/A-2) and the expectation for stand-alone credit profiles, the agency said.

The ratings remain on CreditWatch with negative implications, indicating the potential extraordinary support on the banks may diminish further, S&P said.

S&P said it also lowered Irish Life & Permanent's lower tier 2 subordinated debt rating to B from BB-.

The ratings consider that liquidity is very weak and that all of the banks rely on central bank funding sources, the agency said.

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