EBS incurred a pretax loss of €249.9 million in the first half of the year after taking into account impairments from transferring loans to the National Asset Management Agency (Nama) and losses on remaining loans.
The building society said it made an operating profit of €25.6 million during the period.
EBS expects Nama losses of about €156.8 million, and impairment charges of about €118.7 million for the rest of the loan book, with Nama transfers and discounts expected to be finalised in by December.
The lender has transferred assets totalling €157.2 million to Nama, at an average discount of 37.4 per cent. EBS has a further €658.6 million to transfer to the so-called bad bank.
Total income for the period was down 14.3 per cent to €70.8 million as funding costs increased. However, the company cut costs by 4.8 per cent to €45.2 million, with staff costs reduced by 10 per cent during the six month period.
“Overall our funding position is good, our collateral is very strong and we’re comfortable with our liquidity,” chief executive Fergus Murphy said.
“Clearly the bad debt charge is a very challenging number, but the underlying business in EBS... was and is performing quite well.”
EBS's net interest margin for the first half of 2010 fell from 70 basis points in the first half of 2009 to 50 basis points in the first half of this year. Mr Murphy said this was an all-time low for the institution, but he added that the impact of a recent increase in its standard variable interest rate (SVR) on mortgages would bring the margin back up towards 70 basis points by the end of the year.
With only three actively competing players remaining, EBS now has a market share of almost a quarter of the residential mortgage market. Lending volumes in the first half of 2010 were roughly in line with the same period the previous year, it said.
The Government has injected €350 million into EBS – €100 million in cash and €250 million by way of a promissory note last June. The building society requires a further €437 million to meet the Financial Regulator’s €875 million capital target, which the Government will invest if the lender cannot raise this from private investors.
Mr Murphy said the lender had made good progress in stabilising the business. "We are determined that a viable EBS will continue to play an important role in the financial services market in Ireland," he said.
"The strategic direction of EBS will be determined by the restructuring plan which is currently with the European Commission and the current sale process which is ongoing."
Discussions on the sale of the business are still continuing.
"There has been a very positive, constructive engagement with bidders and a very positive, constructive engagement with the NTMA and the Department of Finance," Mr Murphy said.
"We will continue to work through the process between now and the next number of months and we expect to come to a good solution."