The large stock of problem loans that remain to be worked through by Irish banks remains the “most critical issue” for the sector here and will continue to slow their recovery, ratings agency Moody’s has said. It also expects the Government to dispose of its stakes in Irish banks later in 2017 or in 2018. The State owns 99.9 per cent of AIB, 75 per cent of Permanent TSB and 14 per cent of Bank of Ireland. In a report on Irish banks published on Monday, Moody’s noted that problem loans for rated Irish banks totalled €41.5 billion as the end of 2015, down from €67 billion a year earlier.

Spanish energy firm Abengoa reported a nine-month net loss of 5.4 billion euros ($5.80 billion) on Monday, the week after a court signed off on its debt restructuring plan which should allow it to avoid bankruptcy, Reuters reported. The Seville-based company said the profit loss was due principally to huge provisions on deteriorating assets and the slowdown of its business over the past year as it has sold of assets and slashed its workforce to keep afloat. Abengoa's nine-month core profit - or earnings before interest, tax, debt and amortization (EBITDA) - was a loss of 90 million euros.

Ailing Italian lender Monte dei Paschi di Sienaon Monday announced the terms of a planned debt-to-equity conversion, a key plank of a rescue scheme aimed at averting the bank being wound down, Reuters reported. The bank said the voluntary debt swap offer would target 4.289 billion euros (3.68 billion pounds) of subordinated bonds. It was also considering converting a hybrid financial instrument known as Fresh 2008 worth 1 billion euros.

Ireland has one of the highest shares of non-performing SME loans in the European Union, with many property-related loans secured on SME businesses during the boom, Central Bank governor Philip Lane has said, the Irish Times reported. Speaking at ISME’s annual conference, Mr Lane added that the stock of outstanding balances in default had declined, with fewer SMEs entering default and more returning to performing-loan status. “The SME sector has undergone substantial deleveraging: the stock of loans to SMEs in 2016 is about half that in 2010,” he said.

UK banks look set to boost their loss-absorbing buffers by issuing callable senior debt after being given explicit sign-off to use the structure by the Bank of England, Reuters reported. Two banks could sell the debt as soon as next week, taking advantage of the better-than-expected market conditions that have followed Donald Trump's US election victory. Barclays is one of the rumoured names.

Deutsche Bank AG Chief Executive Officer John Cryan’s troubles range from the company’s mounting legal costs to stricter regulation that’s eroding returns. And there’s at least one challenge he shares with his German rivals: Europe’s most competitive market. “Deutsche Bank still has a lot to deal with, but the German market as a whole is pretty rotten,” said Martin Wilhelm, founder of IfK GmbH, which manages more than 600 million euros ($650 million) of fixed-income securities in Kiel, Germany.

The Central Bank has sold a further €500 million of the boom-time debts racked up by the former Anglo Irish Bank. The National Treasury Management Agency (NTMA) has announced it acquired the 2043 floating-rate bonds from the Central Bank and cancelled them, the Irish Times reported. The transaction is part of the scheme to eliminate the old Anglo promissory notes that were used to bail out the floundering institution at the height of the last financial crisis. The promissory notes were replaced with government debt held by the Central Bank.

Irish households remain the fourth most indebted in the EU, according to new figures from the Central Bank, the Irish Times reported. The quarterly financial accounts show household debt was largely unchanged at €148.4 billion during the second quarter of 2016. This represented a decline of less than €0.2 billion, and was the lowest quarterly fall in household debt since the fourth quarter of 2008, when households first began to reduce debt. The Central Bank said household debt as a proportion of disposable income fell over the quarter from 151.3 per cent to 150.4 per cent.

Germany’s pension insolvency vehicle, the Pensions-Sicherungs-Verein (PSVaG), has for the first time since its inception in 1975 set the contribution rate for companies to 0 per thousand. Because so few insolvencies were reported this year, the PSVaG will not have to take on pension liabilities from companies in financial trouble. The PSVaG also waived its right to set advance payments for 2017 but added that it would review this decision early next year.

Russian state development bank VEB will manage to pay back outstanding debt next year though it will be difficult, the bank's chairman Sergei Gorkov said on Thursday, Reuters reported. Gorkov said VEB had to pay back around 250 billion rubles ($3.9 billion) in outstanding debt next year but Russia's state spending plan envisages only 150 billion rubles for repayment of its debt. "Indeed, it will be tough for us, not an easy task... but we will manage," Gorkov told reporters.