A PricewaterhouseCoopers report has found that Anglo Irish Bank has a number of very large exposures, with 15 of the bank's customers having loans of over €500m each.
The report also describes how the bank's strategy was to deliberately develop deep relationships with its strongest customers and that a small number of customers are involved in a large number of transactions and represent a significant proportion of the Bank's loan portfolio.
The consultants warned in November however, that there were a number of customers, all of whom exhibit potentially serious cash-flow difficulties who were not on the bank's ‘watch or impairment’ lists.
The report said Anglo had about 15 customers who owed more than €500m each and that the size of these exposures increased the risk profile of the bank.
The report warned that there were likely to be significant losses in store for individual property developers that would in turn result in significant losses for the bank.
It said that the bank was owed almost €12bn by just 20 customers who borrowed for investment purposes and another €6.4bn by its top 20development customers.
The report also clearly warned that the controversial €7bn back-to-back deposit arrangement involving Irish Life and Permanent had the effect of grossing up the bank's balance sheet, boosting its customer deposits and interbank assets but that €6bn of this was unwound within three days of the financial year-end.
The report into the bank on behalf of the Government also found that the bank lost €5.4bn in deposits in one week alone during September.
As a result of these outflows of deposits the report says that the bank was forecasting that it was heading for a cash shortfall of at least €12bn by the middle of October.
