Huge loss of 1bn fuels bailout fears at Bank of Ireland

BANK of Ireland reported pre-tax losses of almost &euro;1bn (&pound;895m) yesterday and warned it may need another state bailout.<br /><br />The bank, which has 44 branches in Northern Ireland and runs a financial services joint venture with the UK Post Office, said the past six months had been difficult as it gave a cautious appraisal of future economic prospects.<br /><br />Shares in Ireland&rsquo;s biggest bank have slid on fears that delays in the launch of the National Asset Management Agency (NAMA) would hinder attempts to raise capital privately.<br /><br />&ldquo;While the group&rsquo;s strong preference would be to raise capital from private sources... ultimately it may be required to seek capital from the Irish government,&rdquo; Bank of Ireland said in a statement.<br /><br />The bank&rsquo;s UK division posted a operating profit of &pound;163m but that became a &pound;203m loss when impaired loan charges were taken into account.<br /><br />Bank of Ireland, which has received &euro;3.5bn of capital from the state in return for a 25 per cent indirect stake, said the &ldquo;bad bank&rdquo; scheme was still not clear enough.<br /><br />It added significant uncertainties exist surrounding the specific amount of loans being transferred, when they will be transferred and the price that will be paid for those loans.<br /><br />Ireland&rsquo;s banking sector has been badly hit by the global financial crisis and the collapse of the domestic property market.