Irish Nationwide Building Society has reported a loss after tax of €243m for last year, after setting aside €464m to cover potential losses from loans. In 2007, the after-tax profit was just over €300m.
2008 operating profits were €260m, but the society's total assets fell 10% to €14.4 billion. Irish Nationwide's loan book also dropped 15% to just under €10.5 billion, with much of this due to the fall in the value of sterling. The society has been hit by its heavy exposure to commercial property lending, which accounts for almost 80% of total loans.
The results statement said the society had reserves of €1.2 billion to absorb further charges from bad loans.
Irish Nationwide said it had €2.2 billion of debt which was due to be paid back this year. It said it planned to finance the repayment through reducing its loan book, securitising loans and issuing new bonds. The society is covered by the Government's guarantee scheme, but says its ability to continue as a going concern is dependent on continuing Government support.
INBS said that although 2009 would be another difficult year, it was confident it could achieve its plan to stabilise the society.
Earlier this month, its chief executive Michael Fingleton announced that he would step down at the end of this month. He had come under pressure to resign over a €1m bonus.
Mr Fingleton's move followed pressure from the Government on Irish Nationwide to change the structure of the building society's board and how it operates at executive level.
Cowen defends Government support
Taoiseach Brian Cowen has said Irish Nationwide will be not be bailed out just for the sake of it but if it is its because of the financial stability of the country.
Speaking in Cork, Mr Cowen said under EU guidelines it was important for all governments to support financial institutions of systemic importance and Irish Nationwide is one of them.
Asked about Nationwide making 80% of loans to property developers, he said it was a matter to be addressed by someone in charge at Irish Nationwide.
He said he was not aware of the level of loans to developers and it was a matter for the Financial Regulator to address.
