The Bank of Ireland is reeling today after it announced losses of €1 ($1.45) billion for the half year accounting time up to the end of September.
The Irish bank is also afraid that €6.9 ($10.2) billion‘s worth of loans will not be reimbursed for the time period up to April 2011.
In a statement released on the bank’s website, the following factors were underlined for the difficulty time
“Trading conditions in the first 6 months of our financial year to 30 September 2009 have been difficult. The level of economic activity across our main markets has contracted and the credit environment deteriorated.
“Economic conditions in Ireland were particularly challenging with 2009 consensus forecasts for GDP growth and unemployment disimproving in the earlier part of the reporting period.”
The only positive thing in the report was the Bank suggesting that the economic recession may be slowing somewhat.
“There are some indications of a slow-down in the pace of economic decline in the UK and to some extent in Ireland. Funding conditions across international money markets have improved from the more stressed levels experienced earlier in the year. Notwithstanding these trends, the outlook remains challenging.”
The statement went on to detail that despite recording a pre-tax profit of €80m ($118.4m), overall the bank recorded an overall loss of €979m ($1.45bn) and a loss of 96.6c ($1.4) per share.
The Irish government intervened in the Irish banking crisis when they created the National Asset management Agency (NAMA), which was established to buy up the bad loans incurred by banks.
Finance minister Brian Lenihan pledged that €16 ($23.7) billion’s worth of Bank of Ireland loans would go to NAMA, but the Bank of Ireland is unsure as to when that transfer will take place and how much the loans will be acquired for.
After taking legal advice, the Bank of Ireland has declined to talk to any media interviews on Wednesday about the latest report.