Page last updated at 09:55 GMT, Wednesday, 4 November 2009

Bank of Ireland reports huge loss

The Bank of Ireland
The bank has warned it may need more state support

Bank of Ireland has announced losses of almost 1bn euros (£895m) for the six months to the end of September.

The bank has said that the total value of loans that it thinks might not be repaid will be 6.9bn euros (£6.1bn) for the period to April 2011.

It has warned the Irish government that it may require another infusion of taxpayers' capital.

The bank has 44 branches in Northern Ireland and runs a financial services joint venture with the UK Post Office.

It said the past six months had been "difficult" and gave a very cautious appraisal of future economic prospects, saying there were "some indications of a slow-down in the pace of economic decline in the UK and to some extent in Ireland."

The bank's UK division posted a operating profit of £163m but that became a £203m loss when impaired loan charges were taken into account.

The bank said it remained committed to the UK market and will continue its partnership with the Post Office.

Uncertainties

In September, Ireland's Minister for Finance Brian Lenihan said around 16bn euros worth of Bank of Ireland loans would be transferred into Nama, the country's "bad bank" which is intended to remove toxic property loans from lenders' balance sheets.

However the bank said on Wednesday that significant uncertainties exist surrounding the specific amount of loans being transferred, when they will be transferred and the price that will be paid for those loans.

In a rescue plan for its economy, the Irish government has already pumped seven billion euros into its top two lenders, with Allied Irish Bank and Bank of Ireland each getting 3.5bn euros in state cash.

Ireland's banking sector has been badly hit by the international financial turmoil, the collapse of a domestic property bubble and a deep recession in the former "Celtic Tiger" economy.



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SEE ALSO
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