Sunday, 7 March 2010

The downs and downers of Banks

Allied Irish Bank has one of the worst loan books ever seen at any European bank and could run up losses of more than €3bn this year, according to Simon Adamson, senior analyst with CreditSights. Mr Adamson also said that the bank, which recently reported a pre-tax loss of €2.65bn for 2009, its first ever annual loss, had 'little prospect' of recovering soon.

Northern Rock is this week expected to report pre-tax losses of about £400m for 2009, a marked improvement on the £1.36bn of losses in 2008. Bad debts will hit a record of more than £1bn, reflecting the fact that a quarter of the bank's borrowers are in negative equity and problem loans account for almost 5% of the book.

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