Anglo Irish Bank announces largest loss in Irish corporate history
Nationalised Anglo-Irish Bank today announced the biggest corporate losses in Irish history – €12.7bn.
The lender’s accounts were released a day after the Government revealed it was pumping another €8.3bn into the bank.
The bank said it had been an “exceptionally difficult” 15-month period since it was nationalised in January last year.
The bulk of the losses were because the bank had overvalued assets to the tune of €15.1bn, which had to be written down in what is called an impairment charge.
The majority of this – more than 10bn – was from the €35.6bn in loans being transferred from Anglo to Nama.
The massive losses were slightly offset by operating profit before impairment of €2.4bn, including a €1.8bn gain on the repurchase of capital securities.
In the annual report, Anglo chairman Donal O'Connor admitted they had wildly underestimated the expected knock-down on their assets only last year, after the Bank was nationalised.
In the bank’s interim report in March 2009, Anglo said it would have to write off around €7.5bn in overvalued assets – only half of the actual write-down.
“Unfortunately, our stress scenarios have been more than realised and reflect the very severe deterioration in asset values in the marketplace since March 2009,” said Mr O’Connor.
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