Irish Nationwide, one of Ireland’s leading lenders, has written off almost half a billion euro in bad loans, it was revealed today.
The finance house, which has been heavily exposed to property development and investment in Ireland and Britain, described the losses as disappointing and warned this year would continue to be difficult.
The company’s returns revealed an after-tax loss of €243m for last year compared with an after-tax profit of €309m a year earlier.
In a statement with the results, Irish Nationwide said: “While we hope that markets will be less disrupted than in 2008, the expectation is that 2009 will continue to be a difficult year for the Irish economy and the markets in which we operate.
“The society’s ability to remain a going concern and achieve its business plan is dependent on the continuation of Government support.
“As a systemically important institution, Irish Nationwide was included in the guarantee scheme. The Irish Government is committed to ensuring the continued viability and stability of systemically important credit institutions.”
In total the lender detailed impaired loans worth €464m.
Irish Nationwide said that despite the difficulties it faces from the global recession, the credit crunch and the downturn in property markets, it is confident that it remains a viable lender so long as the Government continues to support it.
The lender has €2.23bn of debt maturing this year and plans to repay the money by reducing its loan book and selling loans on to investors.
It added: “The business plan seeks to stabilise the society in the current difficult financial climate.
“When the financial environment improves, the society intends to reinstate the sale process to release maximum value for members.”
Irish Nationwide is one of a number of banks covered by the Government’s guarantee scheme, which commits to protect deposits and debts for two years.
The lender’s chief executive Michael Fingleton, who has helped build the company over three decades, has announced he will step down at the end of this month. He had come under pressure to resign following controversy regarding his €1m bonus.