Business Irish

Friday 20 April 2018

Few details on Anglo's non-NAMA loan losses

Laura Noonan

Laura Noonan

THE Financial Regulator's assessment on Anglo Irish Bank's future capital reveals no specifics on the write-downs expected on the loans that will go into the nationalised bank's asset recovery vehicle.

The extent of the losses on loans Anglo isn't shipping to the National Asset Management Agency (Nama) has been a major concern amongst commentators, with many questioning the levels of provisions taken so far.

This week's statement from the Financial Regulator reveals that the base case, which would see Anglo needing about €29bn of taxpayer support, was calculated using the worst of three sets of estimates.

Those estimates included the parameters used in the base case for Europe-wide stress tests, Anglo's own loss estimates and the base case estimated by an "independent third party".

The regulator yesterday declined to give any detail on the range of the losses arrived at by those complex mechanisms, and declined to reveal the identity of the "third party".

In Anglo's half-year accounts, just €13.9bn of the bank's €37.7bn non-Nama loan book was described as "impaired", with provisions of 54pc taken on that batch.

The "stressed" case used by the regulator, which brought Anglo's bailout to the €34bn level, included losses of "43pc to 70pc" on the non-Nama loan book, with "a core portfolio of higher quality performing loans" exempted.

The loss for Anglo's remaining Nama-bound loan book was estimated at 67pc by the regulator, a figure the bank's management are understood to see as a little high.

The actual figure for the final Nama discounts will be known by the end of the month.

Irish Independent

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