Subprime lender GE Capital racked up losses of €223m
Published 26/02/2013 | 04:00
SUBPRIME mortgage lender GE Capital Woodchester had only repossessed homes worth a few million euro despite racking up losses of €223.1m over the last few years, according to company results.
The lender recorded pre-tax losses at its Irish business of €107m in 2011 alone, according to accounts filed with the Companies Office.
The losses were sustained after exceptional costs of €92.9m through writing off of bad and doubtful debts. The loss in 2011 follows losses of €71.9m in 2010.
The figures show that the firm had repossessed properties totalling €4.5m on its books in 2011.
A note attached to the accounts stated that "properties were repossessed in 2008, 2009, 2010 and 2011 as a result of a failure by certain customers to meet their contractual monthly mortgage repayments".
The firm ceased to write any new business in mortgage-related products in late 2008, and the figures showed that the firm had €466m in loans to customers at the start of 2011 prior to the bad debt provision.
Last year Australian's biggest independent mortgage lender, Pepper Home Loans Group, agreed to buy GE Capital Woodchester Home Loans for $188m (€149m).
In the three years prior to 2011, GE Capital Woodchester wrote off €84m in bad debts.
The figures show that in 2011, the firm received €10.3m in interest income and paid out €12.6m in interest resulting a gross loss of €2.3m.
The firm also incurred the €92.9m bad debt provision and an additional €11.7m in administrative expenses.