Bank of Scotland (Ireland) reports pre-tax loss of €250m for 2008

BANK of Scotland (Ireland) has, as expected, reported a sobering set of annual results for 2008 — with a pre-tax loss of €250 million replacing a profit of €272m from the previous year.

Bank of Scotland (Ireland) reports pre-tax loss of €250m for 2008

As well as the cost of funding, the key loss-making driver was the rise in the bank’s impairment charge — basically, the amount it uses to cover bad debts. This charge went from €32m to €553m last year, covering 1.79% of its loan book and relating mainly to loans to property developers on the group’s business banking side. However, customer deposits were also down by 32% on the previous year, to €6.6bn

Commenting on the results, outgoing group chief executive, Mark Duffy called 2008 “a very challenging year” and said: “The severe deterioration in the Irish economy has led to rising arrears and falling asset values which, in turn, has resulted in a significant increase in impairments.”

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