Tuesday 20 March 2018

ACC 'bailout' by parent Rabobank hits €930m

Donal O'Donovan

Donal O'Donovan

ACC BANK'S Dutch parent pumped €225m into the loss-making Irish unit last year, as it continued its private "bailout" of the Irish unit for a fourth year, according to results published yesterday.

Despite ongoing losses, ACC said it has no plans to exit the market here.

Irish unit ACC reported after-tax losses of €174m in 2011, down 19pc compared to the previous year's €217m.

The bank had reported a €400m loss in 2009.

The better result was largely down to a lower level of bad debts, which resulted in an impairment charge of €222m in 2011 compared to €263m the previous year.

The loss meant Dutch parent Rabobank had to pump money into the Irish unit for a fourth year, taking total cost of the rescue to €930m over the period.

The losses are mainly on loans originally made to property developers.

Irish head Kevin Knightly said support from the Dutch parent means ACC is able to "proactively engage with customers in difficulty" and at the same time serve the needs of customer less impacted by the recession -- including farms and food businesses.


"In 2012, we will continue to focus on addressing the issues in the loan book, while also concentrating on our core strengths in the food and agriculture sector," he said.

ACC's parent Rabobank is owned by Dutch farming cooperatives and the bank has become a global leader in lending to the agri-sector. Despite that history, it became a significant lender to property developer here during the boom.

Since then, the bank has earned a reputation for taking a more aggressive stance than its peers both in terms of facing up to losses on its books and in terms of calling in bad loans and chasing debtors.

Last year, the High Court ordered TD Mick Wallace to repay €19.5m after the bank moved against him, while a number of other lenders were happy to roll over debts of the controversial developer-turned-TD's construction company.

Despite the commitment to focus on the agri-foods sector, ACC's total lending declined more than 12pc last year to €4.3bn from €4.9bn.

The lower volume of loans outstanding means income -- in the form of interest and commission -- are also in decline, according to the results.

It has also struggled to hold onto deposits, the accounts show. In 2010, a crisis of confidence in Irish-owned banks helped ACC to reap a massive 30pc increase in customer deposits -- to €1.17bn.

Deposits fell back to €895m in 2011, the same year that Rabobank lost its coveted 'AAA' credit rating, and as confidence in the state-owned banks improved.

Irish Independent

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