Irish Bank Resolution Corporation has reported a loss of €724m for the six months to the end of June.
This is mainly due to impairment charges and other provisions of €1.091 billion and compares to a loss of €105m the same time last year.
The bank reported an operating profit of €359m in the six month period, an increase on the €332m recorded in the first half of 2011
The former Anglo Irish Bank said that impaired loans amounted to €18 billion, and represented 40% of total loan balances.
It said that excluding promissory notes and government bonds, it reduced its total assets to €21.9 billion at the end of June from €25.3 billion in December 2011.
The bank said that Ireland remains the worst affected of its markets, accounting for most of the overall impairment charges.
''An absence of bank funding and a large amount of vacant properties continue to drive prices downwards in both commercial and residential property markets,'' it said.
Irish Bank Resolution Corporation is currently winding down its operations and is attempting to work out its loan book in ''an orderly manner'' by 2020 while maximising returns for the taxpayer. It is not engaged in new lending or deposit markets.
IBRC said that asset quality across its portfolio continues to deteriorate and by the end of June 87% of loans were classified as 'at risk'', up from 84% at the end of December.
It added that within the bank's €1.8 billion residential mortgage portfolio, 45% are impaired.
IBRC continue to reduce headcount as wind down continues
Operating costs for the six months came to €129m, down 18% from last year. The bank said that its overall headcount has decreased by 15% by the end of last year. The total includes 256 people who either work directly in , or provide support to, the bank's NAMA unit.
Other administrative costs of €45m are down 25% from the same time last year mainly due to a reduction in professional fees.
"The first six months of 2012 continued to present significant economic challenges for IBRC,'' commented IBRC's chief executive Mike Aynsley.
''Notwithstanding the continued macro economic challenges, the six month period to 30 June 2012 was one of relative operational stability and steady progress towards the orderly wind down of the bank,'' he added.
In today's results statement, the bank said it has actively managed and vigourously defended all legal claims during the six months.
The IBRC chief executive said that the bank will continue to work to achieve its agreed objectives of disposing of its assets in an orderly fashion, while minimising capital losses to the tay-payer.
''While significant progress has been made over the last 18 months, the remaining net asset position of the bank over the period of wind down will be driven by a number of variable factors. This will include recovery rates achieved for assets, the performance of domestic and global economies and the prevailing interest rates in Europe over the duration of the plan''.
''Given the current uncertainties in European markets, the continued deterioration in asset values and the complexities, timescales and risks involved in deleveraging, the final net position unfortunately remains subject to material uncertainty,'' he added.
Anglo Irish Bank posted a full-year loss of €17.65 billion in 2010, a record for an Irish corporate business.
Earlier on RTÉ's Morning Ireland Mr Aynsley was asked about Seán Quinn's claim that the IBRC had destroyed what was a profitable company. He pointed out that losses recorded by the Quinn Group in 2009, the last year in which the group was under Mr Quinn's full control, were the largest ever in Ireland for any company outside the banking sector. "Clearly, it wasn't a profitable business," he stated.
The Quinn family has reacted to his comments in a statement.
"It is sad and pathetic that Mr Mike Aynsley the CEO of Anglo is trying to deflect attention from Anglo's appalling interim accounts, by commenting on the historical performance of the Quinn Group.
"Anglo is fully aware of the enormous successes of the Quinn Group prior to the banks illegal lending to support its own share price.
"Notwithstanding that criminal charges have now being brought against former executives of Anglo for these illegal loans the bank continues to stand over them in defiance of Irish and EU law, maintaining an untenable position. Mr Aynsley's time would be better served justifying the enormous professional fees and salaries being incurred by the bank, not to forget his own salary of over €850,000, rather than defending the indefensible," it added.
