Bloomberg News

Irish Nationwide Abandons Sale After Posting Loss

April 17, 2009

Irish Nationwide Building Society, Ireland’s biggest customer-owned lender, ended a search for a buyer after posting a full-year loss and saying it’s dependent on government support.

The loss of 243 million euros ($318 million) compared with a profit of 309 million euros in 2007, the Dublin-based building society said today in a statement. It set aside 446 million euros to cover property loan losses and investment writedowns.

Irish Nationwide, whose commercial property loans account for about 80 percent of its total, said it’s relying on the extension of the government’s deposit guarantee to issue new debt securities and remain a going concern. The search for a buyer, which started when Ireland changed the law to allow building societies to be taken over in 2006, will resume when “the financial environment improves,” it added.

“Because of the reserves built up over the years from cumulative profits, the society was able to absorb the impairment provision,” Irish Nationwide said in the statement. “The society still has total reserves of 1.2 billion euros to absorb further impairment charges should they arise.”

The building society will refinance 2.2 billion euros of debt securities maturing this year by the “reduction of its loan book, the securitization of loans as well as the issue of new notes,” the statement said.

Irish Nationwide’s total loans fell 15 percent to 10.5 billion euros because of currency movements and customer redemptions.

Chief Executive Officer Michael Fingleton is leaving at the end of this month after 37 years in charge. His exit follows controversy over the payment of a 1 million-euro bonus to him in 2008. He has since repaid the money.

To contact the reporter on this story: Ian Guider in Dublin at iguider@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Willy Morris at wmorris@bloomberg.net


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