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Anglo Irish Bank expects to report a loss of €17.6 billion for 2010, setting a new record in Irish corporate history

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(9 February 2011) The spectacular figure exceeds the €12.8 billion Anglo lost during the 15 months to the end of December 2009 and compares with the €31.75 billion that was Ireland’s total tax take during 2010. During the year the State pumped an extra €17 billion into the now nationalised bank. The bank issued unaudited figures for its 2010 performance yesterday that showed its customer deposits dropped by almost 60 per cent, to €11.1 billion, from the €27.2 billion that was on deposit at the beginning of the year.

The bank is dependent on funds from the Irish and European Central Bank and had borrowings of €45 billion from them at the end of the year. After it has completed transferring loans to the National Asset Management Agency, the remaining loans in Anglo will be approximately €35.8 billion in nominal value, against which the bank is making provision of €8.8 billion. At its peak Anglo had loans to customers worth a nominal €73 billion. Support from the State had reached €25.3 billion by the end of the year, allowing the bank stay within capital requirements set by the Central Bank.

The bank lost €11.5 billion on asset transfers to Nama and expects a further €1.1 billion of gross customer loans to transfer over the coming six months. Average discounts of 62 per cent are being applied to Anglo loans being transferred to Nama. While the cost of staff fell when compared with 2009, the cost of professional fees and other matters to do with the crisis at the bank increased. Total expenses for 2010 were €354 million compared to €309 million the previous year. The bank’s statement issued yesterday described 2010 as an “exceptionally difficult” period for the bank and the Irish economy. The enormous loss included a loss of €11.5 billion arising from asset transfers to Nama and impairment charges of €7.8 billion. Before these items the bank had an operating profit of €1.8 billion arising mostly from the management of its subordinated bonds towards the end of the year. Lending assets at the end of 2010 were €26 billion, down from €56.3 billion at the start of the year. The figure includes €1 billion in assets that are classified as being held for sale to Nama.

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