Business Irish

Saturday 3 December 2016

BoSI losses balloon to €3bn as bad loans soar

Laura Noonan and Joe Brennan

Published 25/06/2010 | 05:00

BANK of Scotland (Ireland) suffered annual losses of almost €3bn last year, more than 16 times the bank's 2008 hit, as loan impairments surged and interest income contracted.

  • Go To

Details of the massive shortfall were revealed in accounts just filed with the Companies Office, which were signed off the day after BoSI announced plans to axe its Irish retail business.

The filings also show the Lloyds Banking Group-owned bank had no idea how much closing the customer-facing business -- including its 44-branch network -- would cost when they decided to pull the plug back in February.

The first Irish branches closed last week and the remainder were shut up on Wednesday. The retrenchment will see about a third of its €32.6bn loan book wound down.

Lloyds has pumped €4.45bn into its flagging Irish unit since late 2008 -- including another €1bn bailout last month.

It disclosed in February that bad loan losses in BoSI stood at €3.2bn for last year, up from €552m for 2008, but gave few other figures.

The bank said Lloyds, which is 41pc owned by the UK taxpayer, has committed to giving its Irish subsidiary "access to adequate resources to continue to trade and meet liabilities as they fall due for the foreseeable future".



Provisions

The accounts show the bank set aside €2.38bn of bad loan provisions against its €13.1bn property and investment loan book. The bank has put a large portion of this portfolio into a new so-called Business Support Unit, where loans are managed extremely actively.

BoSI also paid out €2.17m in "compensation for loss of office" to directors last year.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business