Anglo records worst Irish loss after a £13bn hit on bad loans

ANGLO Irish Bank, the leading casualty of Ireland's banking crisis, yesterday reported the biggest loss in the country's history.

It revealed a 12.7 billion (11.3bn) loss in the 15 months to the end of last year as it took a massive hit of 15.1bn in write-downs on its bad loans.

The bank's accounts were released a day after the Irish government revealed it was pumping a further 8.3bn into the bank, bringing its total support to 12.3bn in 2009.

The Dublin-based bank, which was nationalised in January 2009, said its position had deteriorated sharply since May when it predicted that impairment losses were likely to total 7.5bn.

Anglo chairman Donal O'Connor yesterday said: "Unfortunately, our stress scenarios have been more than realised and reflect the very severe deterioration in asset values in the marketplace since March 2009."

Anglo delayed releasing its results as it awaited European regulatory approval of the state's cash injection. The European Commission also announced it would investigate the government aid received by Anglo and its accompanying restructuring plan.

Earlier, Bank of Ireland, the healthiest of the country's battered banks, reported a 1.47bn loss for the final nine months of 2009 as it booked impairment charges of just over 4bn on bad loans.

Some legislators have called for Anglo to be wound up, but Irish finance minister Brian Lenihan said that would be far more expensive, costing the state an immediate loss of 30bn while also stumping up 70bn to cover the bank's liabilities. He believed Anglo could recover and return to private ownership within seven years.

Anglo intends to place 36bn in dud loans – the largest amount for any Irish bank – in the National Asset Management Agency (Nama), the "bad bank" set up to deal with the crisis. Initially, Anglo will placing 10bn in Nama at a discount of about 50 per cent.

Anglo – a specialist commercial lender that took great risks from which it profited handsomely during the Celtic Tiger's Europe-leading property boom of 1994-2007 – faced catastrophic losses when the Irish property-speculation bubble burst in 2008. It was also an aggressive lender to property firms in Scotland, with clients including WG Mitchell, the McKever Group of hotels and FM – all of which went into receivership last year.

The bank, which has offices in Glasgow and Edinburgh, had 200 corporate customers and an estimated 700 million in loans in Scotland, although it did not confirm current client numbers.

Earlier in March, former chairman Sean FitzPatrick and former finance director William McAteer were arrested and quickly released as part of a continuing criminal investigation into the bank's affairs.