ACC Bank, which is owned by Dutch financial group Rabobank, has reported a loss after-tax of €244 million for last year. This compares to an after-tax profit of €39.9 million for the prior year.
Contributing to the loss was a trebling of the size of ACC's bad loan provisions to €373.1 million, up from €79.5 million in 2007.
The bank said it revised up these provisions following a detailed review of its loan book, “particularly those loans and advances to customers in the construction and real estate sectors”. Over €78.2 million of these are losses that the bank estimates have been incurred but not reported at the year end.
“The increased impairment charge reflects the recent sharp deterioration in the Irish economy and brings the total provisions at the balance sheet date to €373.1 million,” the bank said in a statement.
ACC also received €175 million from its parent Rabobank in December to “to ensure the bank is adequately capitalised.
The bank’s capital ratio was 10.1% at the end of the year.
ACC Bank chief executive Rob Hartog: “While the results for 2008 are very disappointing, we are well placed to manage our business and address the issues in the loan book. The bank continues to enjoy the full support of its parent.”
ACC's loans and advances to customers declined to €6.5 billion down from €6.8 billion in 2007. It said commercial loans represented 67 per cent of its lending book.
Income rose 4.7 per cent to €167.2 million, the bank said.
Rabobank said today its 2008 net profit rose 2 per cent, helped by one-off items, and it cut its profit growth target to accommodate a lower risk profile.
Net profit rose to €2.75 billion in 2008 from €2.7 billion the previous year, and after booking a €1.2 billion writedown mostly on credit assets, such as subprime and corporate loans, co-operatively owned Rabobank said in a statement.
"One-off gains, including the sale of Alex and the consolidation of Bank BGZ, made a positive contribution to the result," the bank said.
Rabobank, the third-biggest Dutch bank after ING and state-owned ABN AMRO, based on 2007 balance sheet totals, cut its annual net profit growth target to 10 per cent from 12 per cent previously.
The bank, which unlike ING or Dutch insurer Aegon has not taken state aid, lowered its target because Rabobank International would focus on activities with a lower risk profile, it said.
Additional reporting Reuters
