The upside of any BoI and AIB capital raising unlikely to be felt locally

Both AIB and Bank of Ireland are likely to shore up their capital positions as a result of bigger than expected losses faced by transferring property loans across to Nama. As they restructure, there could be a raft of work for financial institution group bankers, but sadly the benefit of this will not be felt locally.

The 30% 'haircut' expected on the value of property loans handed to the state rescue agency is expected to total €12bn. These writedowns are likely to require the banks to raise fresh funds to bolster their capital positions by, according to analyst estimates, a combined €9bn. Let's not forget that BoI has already ruled out further state aid.

So, assuming this materialises as rights issues, it could provide another boost to FIG investment bankers...in London. For instance, when BoI raised €1bn through bond issuance in September, it was advised by Barclays Capital, Deutsche Bank, JPMorgan and RBS.

This year was already big for FIG hiring, but 2010 looks to be even more plentiful. The likes of BarCap, Evercore, Moelis, Jefferies, Fox-Pitt Kelton, Greenhill, Lazard, and Fenchurch Advisory Partners are all thought to be building their FIG teams.

But while London bankers are benefiting from Ireland's woes, the affect locally could be negative, with the banks likely to continue their focus on reining in costs. And this could filter down to a need to reduce headcount.

Brian Lucey, associate professor in finance at Trinity College, Dublin says: "Ireland's two main banks will need to divest assets - preferably overseas, but to some extent locally. They'll also need to radically reduce their cost base, which is likely to result in smaller headcount. That said, I believe value-added divisions, such as capital markets and corporate banking, will be better placed than the retail side, where the majority of cuts will occur."