Anglo Irish Bank pre-tax profits fall 37% to €784 million

Anglo Irish Bank has reported a 37 per cent fall in pretax profits to €784 million for the year to September 30th.

The bank also revealed it has put aside €500 million in provisions for future loan losses, or 0.71 per cent. This compares with €31 million last year. It reported leading impairments of €224 million, or 32 per cent.

By 10.08am Anglo Irish Bank shares were 11.7 per cent lower on the Iseq at 83 cents.

In the first full-year profit data from an Irish Bank since the Government's guarantee scheme was put in place Anglo Irish reported earnings per share (EPS) for the year to the end of September fell 34 per cent to 88.4 cents, with adjusted EPS at 85.8 cents.

Anglo Irish said it cut its costs by 16 per cent or €60 million.

"We will continue to generate robust core profits annually over the next three years, which will provide the capacity to absorb anticipated increased lending impairments," chief executive officer David Drumm said in the statement.

Mr Drumm said he sees "no merit" in a one bank solution for Ireland and said Anglo Irish plans to remain independent. He said all options would be examined with regard to capital but stressed that the bank was currently "well capitalized".

He added that Anglo was "not talking to other banks" and that a merger "hasn't been on the agenda. Anglo as a banking force in Ireland is much more relevant than it ever was."

Speaking on RTE radio this morning Mr Drumm said: “We’ve 6.7 per cent core ratio, the requirement is 4 per cent. The world has moved on, perhaps 8 per cent is the new 6 per cent. We are cognizant of that.”

“The only question, and we haven’t answered it for ourselves, is whether we would accept additional capital externally. We will look at the merits of that,” he said.

“If we do, it will be on terms, if they are suitable for the bank and we will be very cognizant of the impact on our existing shareholders.”

"We've had a good number of phone calls from our shareholders saying ... you haven't made up your mind yet, but if you are going to raise capital, we want to participate," Finance Director Willie McAteer told Reuters.

"What they don't want really is a private equity firm coming in an diluting them," McAteer said in a phone interview. 

The bank has frozen executive pay and no bonus payments will be made this year resulting in a 50 to 60 per cent cut in remuneration for executives.

Lending increased by €9.3 billion on a constant currency basis to €73.2 billion, the bank said with growth moderating to 5 per cent in the second half of the year.

Lending by Anglo's Irish division came to €42.8 billion, up from €37 billion the previous year.

Of this, investment and business banking of accounted for €31.6 billion while €5.9 billion was allocated to residential development and €5.3 billion to commercial development.

Additional reporting agencies