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 €2.37bn (£2bn) for potential loan losses.
The bank lost €872m in the first half, compared to a €1.28bn profit earned in the first half of 2008.
The bad debt charge of €2.37bn represented 3.6 per cent of total loans, while the bank categorised 8.1 per cent of its loan book as impaired.
“Clearly we took risks in the property sector that we shouldn’t have taken and clearly over-extended in the domestic market,” said finance director John O’Donnell.
The year has seen the bank take a €3.5bn cash injection from the government, as well as launching a capital exchange offering in June, generating €1.1bn in core tier 1 capital.