National Irish Bank reports losses of €552m

NATIONAL Irish Bank (NIB) has reported a pre-tax loss of €552 million for 2008 — brought about mainly by an increase in the amount of money it set aside for losses arising from “bad” loans.

The Irish banking division of Danish group, Danske Bank, actually made a profit of €71m before impairment charges are taken into account, saw income rise by 13% and costs fall by 12%. However, it also reported loan loss impairments of €228m; while Danske announced a one-off goodwill write-off of €395m in NIB’s total value — hence the overall loss for the year.

While NIB’s total loan book is valued at €10.7 billion, the €228m loss impairment represents 2.14% of loans. The vast majority of the “bad loans” — around 75% worth — are linked with commercial property clients. The bank’s exposure here is valued at around €3.5bn, while only a minimal amount of bad debts come from residential mortgage holders.