ACC BANK, which is owned by Dutch financial group Rabobank, has reported a loss after tax of €244 million for 2008 due to a steep rise in its bad debt provisions. This compares to a profit of almost €40 million after tax a year earlier.

Although the bank grew its income by 4.7 per cent to €167.2 million last year, it increased its loan impairment provision by €306.5 million to reflect the sharp deterioration in the Irish economy.

“This level of provisions for bad debts was arrived at following a detailed review of the loan book, particularly those loans and advances to customers in the construction and real estate sectors,” it said in a statement yesterday.

“While the results for 2008 are very disappointing, we are well placed to manage our business and address the issues in the loan book,” Rob Hartog, chief executive of ACC, commented. “The bank continues to enjoy the full support of its parent.”

Rabobank injected extra capital of €175 million into ACC in December to ensure that the bank was “adequately capitalised”. This was in addition to the normal liquidity that it provides to its subsidiary.

ACC’s capital ratio at the end of the year was 10.1 per cent.

Rabobank cut its profit growth target yesterday, saying it would focus on lower-risk activities, as it reported 2008 net profit up 2 per cent after €1.2 billion in writedowns.

Rabobank’s net profit rose thanks to a 13 per cent increase in profit at its Dutch retail banking operations to €1.6 billion, although a 92 per cent drop in net profit to €27 million at its wholesale and international unit weighed on the group’s results.

The Dutch bank also said that it will cut “a few thousand” jobs out of about 61,000 worldwide, as it is selling more products over the internet.

Rabobank is not interested in a takeover in Ireland, chairman Bert Heemskerk told reporters yesterday at a news conference in the Dutch city of Utrecht.

“We’re satisfied with the little bank we have over there,” Mr Heemskerk said.

Rabobank bought ACC Bank from the Irish Government in 2002. – (Additional reporting by Reuters)