SOURCE: The Bedford Report

The Bedford Report

September 29, 2011 08:16 ET

Liquidity Concerns Weigh on Bank of Ireland and Barclays

The Bedford Report Provides Equity Research on Bank of Ireland & Barclays PLC

NEW YORK, NY--(Marketwire - Sep 29, 2011) - Banks in the Eurozone and the UK have been struggling to sell debt at affordable prices to investors, who are wary of the banks' vulnerability to risky euro-zone government bonds and other loans. The Bedford Report examines the outlook for companies in the Foreign Banking Sector and provides stock analysis on The Bank of Ireland (NYSE: IRE) (LSE: BKIR) (Irish: BIR.IR) and Barclays PLC (NYSE: BCS) (LSE: BARC). Access to the full company reports can be found at:

According to data provider Dealogic, the amount of senior unsecured debt issued by the Continent's financial institutions this quarter is on track to be $34 billion -- the smallest amount in any quarter in more than ten years. As The Wall Street Journal documents, most of those were small deals of less than $500 million apiece. Traditionally, issuing such debt has been among the most popular ways for banks to finance themselves over the long term.

There are also liquidity concerns for these Foreign Banks. Traditional lenders such as US money-market funds and fellow banks, have become wary of lending outside of very short periods. European officials are being pressured to respond. The Wall Street Journal says one possibility is for euro-zone governments to issue a blanket guarantee of the industry's debts.

The Bedford Report releases investment research on the Foreign Banking Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Foreign Bank stocks have performed well this week, however. Despite denials from both banks and politicians, reports that European authorities were busy preparing a bank rescue package worth billions of euros sparked an upswing in bank share prices.

Bank of Ireland's reliance on emergency funding from the European Central Bank and its own central bank fell to 29 billion euros from 31 billion at the end of December. The company's underlying operating profit shrank by two-thirds in the first half of 2011 on steeper funding costs. The cost of the government guarantee of Bank of Ireland's liabilities rose 58 percent from a year ago to 239 million euros in the half.

British banks, including Barclays, could be forced to pay customers billions of pounds in compensation over the mis-selling of payment protection insurance that was supposed to cover the repayment of people's loans if they experienced a fall in income because of illness or job loss. Barclays has set aside one of the largest funds to pay possible compensation claims.

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