In the opening weeks of 2020, Ireland’s bankers had reason to be optimistic. The country’s lenders were in a position of strength, most of them having cleaned up their balance sheets in the decade since the global financial crisis.
Capital ratios across the system were high: the five leading banks boasted an aggregate transitional common equity Tier 1 ratio of 19%, according to the central bank. In addition, the ratio of non-performing loans (NPLs) had fallen from 30% in 2014, to just 6% by the end of 2019. Though the hunt for higher profitability remained elusive, the post-global financial crisis (GFC) years of prudent stewardship had placed Irish banks at a developmental inflection point, ready for the next stage of their growth story.
