State-owned Anglo Irish Bank today announced a stunning loss of €8.2bn loss in H1 2010. This compares with red ink of €4.1bn in the same period last year and the bank has set the ignominious record for an Irish corporate loss in a six-month period.

The loss includes writedowns on loans of €4.8bn and a loss of €3.5bn on transfer of €10.1bn of loans to the State's toxic property loans National Asset Management Agency (NAMA). The loans had been sold at a discount of 55% because of dodgy paperwork and collateral,  resulting in a loss of €5.1bn. The former builders' bank said impairment provisions include €2.3bn relating to assets classified as held for sale to NAMA, bringing cumulative specific provisions on such loans to 38%.

Operating profit before impairment and loss on disposals to NAMA was €151m.

At the end of June 2010 the bank expected to transfer €25.9bn of nominal loan assets with associated impairment provisions of €9.7bn to NAMA. The former amount excludes the €10.1bn nominal of assets that transferred to NAMA in May and June; €5.9bn of nominal loan assets were subsequently transferred to NAMA in August resulting in an additional loss on transfer of €1.6bn;

Following the completion of loan asset transfers to NAMA, gross customer loans will be approximately €38.4bn with cumulative specific provisions at 30 June 2010 of €6.5bn.

Last March, the former builders' bank announced a loss of €12.7bn for the 15-month period to the end of 2009 after writing off €15.1bn on loans and investments. It had previously announced a loss of €4.1bn for the six months to the end of March 2009.

The State has already provided €14.3bn in capital to Anglo and a further €10bn has been approved by the European Commission.

While Central Bank governor Patrick Honohan has publicly said the Anglo bailout will not exceed €25bn, last week credit ratings agency Standard & Poor’s estimated a cost at €35bn.

The ultimate cost of a wind-down could exceed €40bn

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Irish Economy Blog thread on Anglo

Anglo Irish Bank closed at 22 euro cent on the Irish Stock Exchange, on its last day of trading before becoming a State-owned bank. On February 21, 2007, the ISEQ index rose to an-all time high of 10,041 and the Financial sub-index rose to 18,098. Bank of Ireland closed at €18.65; Anglo Irish closed at €16.64 and AIB closed unchanged at €23.95. A year later, on February 21, 2008, AIB closed at €13.80, Anglo Irish Bank finished at €8.84, while Irish Life & Permanent closed at €10.20 and Bank of Ireland traded at €9.50. Seven issues dominate the Irish market and in recent years, overseas residents, dominated by institutions, have owned more than 60% of Irish bank shares. Ireland's biggest company CRH, accounts for about a third of Irish market capitalisation and in December 2007, foreign holders held 84% of the issued shares.