EBS BUILDING Society subsidiary Haven Mortgages has reported a €6 million loss for last year despite steps to improve margins.

Haven, the brokerage channel for the building society which is being subsumed into AIB, saw provisions for impaired loans more than treble to €17.3 million over the year.

Despite the rise in impairments, the overall loss was in line with 2009 because of a rise in income from interest.

The company said interest income rose just over 15 per cent to €34.3 million mainly due to increased mortgage lending during 2010 and also because of an increase in mortgage margins.

At the operating level, Haven reported profits of €4.9 million in 2010 before impairments compared to a loss of €2 million the previous year.

The company reduced operating costs in the year to just over €5 million from €7.8 million in 2009.

In a review of the business, the company said the brokerage market now accounted for close to a third of all EBS’s mortgage business. Established in 2007, when EBS finally agreed to deal with intermediaries in the mortgage market, the company said it now had market share of 12.4 per cent compared to about 10 per cent in 2009.

It acknowledged that the market as a whole was contracting significantly. “However, although reducing, it remains an active market,” the company’s directors stated.

The rise in market share “clearly demonstrates Haven’s ability to remain competitive during a very challenging year”.

The company said affordability levels for new homeowners were now at their highest levels in 25 years. Average mortgage repayments had fallen by 48 per cent over the past three years to €639 a month.

However, with directors expecting no economic recovery before 2013, Haven is cautious in the outlook for growth in the mortgage market. “This reduced level of repayments will take time to translate into mortgage transactions and, as a result, the mortgage market in 2011 is expected to be in line with 2010 levels.”