This is totally absurd!
Nationalised Anglo Irish Bank today posted losses of 8.2 billion euro (£6.7 billion) for half of 2010, claiming it was still battling through an exceptionally difficult period.
The state-run bank, which has been funded by 23 billion euro (£18.9 billion) of taxpayers’ money, said it expects further losses as more assets are shifted off the bank’s books.
“The new management of Anglo Irish Bank is working to significantly restructure the bank’s balance sheet, risk profile and culture in order to restore viability,” the bank said.
A breakdown of the six monthly returns showed it transferred 10 billion euro (£8.2 billion) of assets to Ireland’s so-called state controlled bad-bank, the National Asset Management Agency (Nama), set up to try to clean up troubled loan books of Irish lenders.
The bank said it suffered loan impairment charges of 4.8 billion euro (£3.9 billion) and a loss of 3.5 billion euro (£2.8 billion) over the transfer.
Anglo Management said it was grateful for the continuing support of Finance Minister Brian Lenihan.
Anglo already holds the unenviable record for posting the largest losses in Irish corporate history last year, one of the biggest losses in world banking and now one of the worst half year performances of any Irish company.
Anglo said it had an operating profit of 151 million euro (£124 million) before the costs of impairments and losses on disposals to Nama hit home.
The bank’s last results, issued in March for the 15 months to the end of 2009, showed losses of 12.7 billion euro (£10.4 billion) – the highest in Irish corporate history.
International finance commentators at ratings agency Standard & Poor’s last week warned that Anglo could ultimately cost the state 35 billion euro (£28 billion).
Anglo chairman Alan Dukes said that after examining all options, the bank would be split.
He said 80% of the old bank will be wound down and a new viable bank created from the remaining good quality loan assets.
“It is the board’s strong view that this restructuring plan represents the best possible outcome for the taxpayer of all the alternatives available,” Mr Dukes said.
The European Commission is expected to give its views on plans for restructuring next month.
Mr Dukes said splitting the bank is the best option because it requires the least state aid and Government funding; it offers a chance to take part in the reconstruction of the banking sector while safeguarding the stability of the Irish financial system; and gives Government a credible way out in a future sale.
“While there are considerable losses and funding requirements associated with the proposal, they are much less than those that would be generated in a full wind down scenario,” Mr Dukes said.
“Although the strategy to split is relatively straightforward and the concepts behind it are well grounded, the implementation of such a far-reaching corporate restructuring is complex and will require the commitment, leadership and resolve of all involved.
“However, while the challenge facing us is considerable, I am confident we now have a management team in place that is capable of meeting it successfully.”
Tuesday, 31 August 2010
Source: The independent