The chief executive of EBS Building Society has said it would be irresponsible of senior management not to look at all options for the future of the society given the current financial climate of recession and problems in the financial sector.
Speaking on Morning Ireland, Fergus Murphy predicted that the second half of 2008 will be loss making for the EBS. He added that the building society is not ruling anything in or anything out with regard to its future.
Mr Murphy said the society has around €500m or 2.5% of its total loan book exposed to what it calls 'development finance to the commercial property sector'. He said there would undoubtedly be some pain there given falling land valuations.
He said there had been increase in the numbers of loans in arrears, as there was with all lenders, but added the current year would be the low year for the society in terms of the down cycle.
Mr Murphy said the second half of 2008 would be a loss period for the EBS. However, he said it was difficult to gauge what the full year picture would be like in terms of profit or loss.
In September, EBS disclosed that its profits fell by 37% to €24m in the first six months of the year.
Mr Murphy added that the society had been around for 73 years and he expected the society to be around for another 73 years. But he was unable to commit to stand-alone mutuality.
He said the mutual model was working but the society was evaluating other options in the interest of members. He said he would not rule anything in or anything out.
The society along with the other five Irish financial institutions covered by the €400m Government guarantee scheme, have until later this week to submit plans to the Financial Regulator on how they are to manage lending over the period of the guarantee.
Meanwhile, accountants PricewaterhouseCoopers is conducting a forensic examination of the six Irish institutions to assess their level of bad debt exposure on property lending.
Yesterday, the Sunday Independent revealed details of a memo drawn up by the EBS Building Society's public relations consultants Q4, outlining scenarios for the future of the society including demutualisation and sale to another institution or merging with another institution.
