Anglo Irish Bank has reported a pre-tax loss of €101m for the first six months of this year. This compares to a loss of €8.2 billion the same time last year, when it published the worst results in Irish coporate history for the second year in a row.
In the six months to June, Anglo's total lending impairment charge, or loans unlikely to be repaid, fell to €778m, from €4.7 billion the same time last year, reflecting a reduction in loan balances and the transfer of assets to the National Asset Management Agency.
It said that impaired loans by the end of June totaled €16.9 billion, representing 52% of overall loan balances compared to 48% by the end of December, 2010.
Between Janaury and June this year the bank's deposits were transferred to AIB, and the European Commission approved a restructuring plan to merge Anglo and Irish Nationwide Building Society, after the transfer of the majority of their deposit books and their senior NAMA bonds to other financial institutions.
The bank said that its total assets at the end of June amounted to €54.1 billion, a decline in the period of €16.7 billion or 24% on the same time last year. Customer funding decreased by €10.4 billion to €0.7 billion in the six month period.
Mike Aynsley, the bank's chief executive, said the asset quality of the bank's loan books across all sectors and locations continues to be adversely affected by the continuing difficult economic and market conditions.
He said Ireland accounts for 82% of the impairment charge, and is the bank's worst affected market, with further declines in property values, a lack of liquidity and high levels of unemployment.
He said this showed no sign of easing in the six months, as domestic demand was weak, investment and Government spending declined and household spending was static.
'I believe that the work completed by those in the bank over the last 18 months has paved the way for an orderly and effective work out which is in the best interests of the Irish taxpayer,' he stated in today's results statement.
'This reflects a major shift in focus for the organisation from being a high octane lender to an effective asset manager of portfolio sales and redemptions. This focus will remain the bank’s priority as we face into the challenges of the next phases of restructuring,' he added.
Mr Aynsley said that the plan was to resolve the bank by 2020. 'People do not have any expectation of a long-term career here,' he said.
He also said that Anglo 'is no longer systemically dangerous'.
Publishing its results this morning, the bank's chairman Alan Dukes said that the first half of the year had been 'eventful' for the bank.
Its staff costs fell by 16% in the six month period, but other costs - such as professional fees and reviews - have increased by 50%.
The bank's headcount by the end of June stood at 1,075, a reduction of 221 since 31 December 2010. It includes 130 people working in the bank’s NAMA unit.
It says the sale of its US loan book is underway and will be complete in coming months. This sale could be be capital positive, the bank said.
Its commercial loan book in the UK will be wound down over the next five years. Its Irish residential loan book will be wound down over five years, and its commercial loan book over ten years.
The bank, whose name is changing to Irish Bank Resolution Corporation, has to date received total capital support of €29.3 billion.
Mr Aynsley said the total cost to taxpayers would be less than previously thought.
Instead of being in the range of €29 billion to €34 billion it will now be between €25 billion to €28 billion, he said. Mr Aynsley said it could be at the lower end of this range.
