Two board members are to stand down at the Educational Building Society over losses incurred last year.
The building society today reported pre-tax losses of just over €38m after setting aside €110m to cope with losses from loans. EBS says it is dealing proactively with losses in its commercial loan book, and can now move forward decisively.
Chairman Mark Moran and finance director Alan Merriman are to step down, though Mr Moran will stay on until the AGM in May. They said it was important to show accountability and responsibility for the 'poor' results. No bonuses will be paid to management this year.
In terms of lending to the commercial property development sector, EBS got in on the act pretty late and started lending to developers only when the sector was already starting to decline.
The building society now has to write off over 20% of its development finance book over a two-year period.
Its €110m charge also includes €15m to provide against funding given to one of the Icelandic banks which was nationalised last year.
EBS said its estimate of loan losses on around €500m of development lending was realistic, as it was likely to be early to mid-2011 before house prices and employment would start picking up again.
The society said its loan book grew by 6%, while total revenue fell 11% to €172.3m. It said its balance sheet was strong and well above regulatory requirements.
