Rising loan losses plunge Allied Irish into the red

ALLIED Irish Bank swung to a pre-tax loss in the first half of the year, as it made a provision of &euro;2.37bn (&pound;2bn) for potential loan losses.<br /><br />The bank lost &euro;872m in the first half, compared to a &euro;1.28bn profit earned in the first half of 2008.<br /><br />The bad debt charge of &euro;2.37bn represented 3.6 per cent of total loans, while the bank categorised 8.1 per cent of its loan book as impaired.<br /><br />&ldquo;Clearly we took risks in the property sector that we shouldn't have taken and clearly over-extended in the domestic market,&rdquo; said finance director John O'Donnell.<br /><br />The year has seen the bank take a &euro;3.5bn cash injection from the government, as well as launching a capital exchange offering in June, generating &euro;1.1bn in core tier 1 capital.