BAD DEBTS cost subprime mortgage specialist GE Woodchester Capital Home Loans almost €84 million between 2008 and 2010, the latest figures show.
Accounts just filed by the multi-national-owned finance house show that in 2010 it increased provision for bad debts – home loans it believed were unlikely to be paid back – by 13 per cent to €68 million from €60 million in 2009.
The figures show that, between 2008 and the end of last year, the company wrote off €83.9 million in bad loans from a total loan book of €545 million.
This meant that by December 31st last it had written off 15 per cent of the total due to it from customers. At the end of 2009, the accumulated figure was €46 million.
The home-loans company confirmed yesterday that the €83.9 million figure represented the total accumulated write-off for the 2008 to 2010 period.
It said the main explanation for this was the decreasing market value of the properties involved combined with the increasing number of non-paying and partially paying customers.
GE Capital Woodchester Home Loans specialised in “subprime” lending, ie providing mortgages to customers where there is a higher risk than normal that they will not repay the debt.
It was one of a number of such operators in the Republic. The company ceased its lending activities in 2008 and is now focused on collecting the money due to it.
The company said yesterday that it remained committed to the long-term active management of its loans in the Republic, and pointed out that in some cases it loaned the money out over 20 years or more.
The directors’ report, signed by Ciarán Barr and Chris Helme, states that the company’s financial results “may cast doubt” on its ability to continue as a going concern.
However, they point out that its parent, the US-based multi-national General Electric corporation, has given an undertaking that it will provide any funding necessary to the business to keep trading in the Republic.
The company confirmed yesterday that it was committed to maintaining its operations here.
By the end of last year, it had €462 million in outstanding loans, down from €556 million at the end of 2009.
The company had interest income of €18.4 million in 2010, a 40 per cent fall on the previous year, when the figure was €31.4 million.
Losses were €72 million, which the company attributed to the €68 million bad debt provision for 2010 as well as general market conditions. It lost €51.5 million in 2009.
The accounts show that it owed other group companies €633 million at the end of 2010. This was its only liability.
Assets were €571 million, leaving it with net liabilities of €116 million, almost three times the €43 million recorded at the end of 2009.
