Bank of Scotland (Ireland) has reported a pretax loss of €250 million in 2008 due to higher funding costs and rising impairments.
In 2007 the company reported pretax profits of €272 million. The bank has written off €533 million due to bad loans.
BoS (Ireland) said the percentage of impaired loans rose from 0.12 per cent in 2007 up to 1.79 per cent last year. The bank said the pace of the economic deterioration in Ireland had led to “rising arrears and falling asset values”.
It said the impairments were primarily in its residential property development portfolio where 9.7 per cent of loans were under-performing.
It said loans to business banking customers and retail customers rose 8 per cent to €32.1 billion. Some €5.8 million of this loan book is for property development, with residential property lending accounting for €3.2 billion.
The bank also has €6.9 billion in property investment loans.
The company said “extremely challenging” economic and market conditions have led to a deterioration in credit quality.
Deposits were 32 per cent lower at €6.6 billion compared with €9.7 billion at the end of 2007. The bank’s cost to income ration dipped to 41.4 per cent from 42.9 per cent in 2007.
The company employs around 1,600 people and has converted more than 40 former ESB stores into Halifax branches.
