29 May 2009

Anglo Irish Bank lost € 4 Billion in six Months

Another day, another scandal. This is now the norm here in the Irish banana republic.

Today's serving of outrage is the news that (the now nationalised) Anglo Irish Bank (right) has lost a total of € 4.1 billion in six months (the fourth quarter of 2008 and the first quarter of 2009).
This is on average a loss of € 683 million each month, or € 22.75 million every single day! And it is also the by far biggest bank loss in the history of the Irish state.

The bank's results also show that deposits from businesses have dropped by almost € 9 billion after nationalisation.

Anglo Irish Bank's new chairman Donal O'Connor says that "lending has been imprudent, and the results are very disappointing".

I put it a bit more bluntly: The bank's behaviour was nothing but criminal. And thus those who were responsible for the blunder should be prosecuted and brought to Justice.

Donal O'Connor also indicates that "the total loan losses are likely to reach € 7.5 billion".

Anglo Irish Bank has now written off the sum of € 308 million in relation to loans to ten 'long-standing clients', who then used these funds to buy shares in the bank.
The ten very wealthy individuals who participated in this scam subsequently became known in public and in the media as the 'Golden Circle'.
A total amount of € 451 million was lent by Anglo Irish Bank to members of the 'Golden Circle' , but as it looks the bank may not get € 308 million of that money back.

Among the losses disclosed today were also € 31 million on loans to former directors of Anglo Irish Bank.

The government now plans to seek the EU's approval to put another € 4 billion of State money - which means in fact Irish taxpayers' money - into Anglo Irish Bank in the coming weeks.

Finance Minister Brian Lenihan (left) has announced that he will recapitalise the rotten bank.
"Winding up Anglo Irish, the third-biggest bank in the country, is not an option," he stated, nailing his colours firmly to the mast of a sunken ship. "The priority is to stabilise the bank," Lenihan emphasised.

Well, I am no banker, but as an old sailor let me say this: One can well stabilise the wreck of a sunken vessel, in order to prevent it from drifting, slipping or from becoming a danger to other shipping. But one can never re-float and sail a ship after it was sailed onto rocks and crashed.

The Emerald Islander

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