Ireland May Be About To Take Control Of Two Lenders (IRE)

According to Bloomberg, the Irish government could take controlling stakes in the Bank of Ireland and Irish Life & Permanent.

On Friday at 4:30 p.m., the Irish Central Bank will publish its third round of stress tests. From the results, Ireland will determine if the Bank of Ireland (NYSE: IRE) and Irish Life & Permanent can avoid joining four of the country's biggest banks in majority state ownership after all of them logged record losses.

“They've clearly got most to lose,” said Oliver Gilvarry, head of research at Dublin-based Dolmen Securities. “It's difficult to see how either will end up less than 50 percent owned by taxpayers.”

The government may require the banks to raise an additional $39 billion (27.5 billion euros). It has pledged to provide that money from a 35 billion-euro fund set up under Ireland's international bailout in November. However, since that rescue, shares of the two lenders have declined a further 50 percent leading analysts to believe that a government takeover may be imminent.