IBRC prepares to write off even more Quinn debt
THE FORMER Anglo Irish Bank increased the amount it believes it is unlikely to recover from Seán Quinn and his family in its accounts for the first half of the year due to their actions to put assets beyond the bank’s reach.
The State-owned Irish Bank Resolution Corporation (IBRC), as Anglo is now called, raised the bad debt provision against the Quinns’ €2.88 billion loans to more than €2.3 billion from €2.2 billion.
The higher bad debt provision against the largest customer of the bank relates to the loss of rental income and cash flow from Russian properties and the timing around when the bank had expected to seize those assets.
The increase will not mean any further call beyond the €29.3 billion injected by the Government for the bailout of the bank as its existing capital covers the higher expected loss on the Quinn debt.
IBRC chief executive Mike Aynsley declined to say at the publication of the results last week how much of the €2.88 billion the bank might get back. There are “substantial recoveries” to come through the family’s international property group and other recoveries, he said.
IBRC has been unable to secure control of properties in Russia, Ukraine and India, and it has told the High Court in its ongoing legal proceedings against the Quinns that $32 million (€26 million) of rental income on property in Russia remains unaccounted for.
The bank has taken legal actions against the family for control of the properties, which are valued at about €500 million.
Mr Quinn’s son Seán jnr is serving three months in jail for contempt of court for putting assets beyond reach of the bank.
IBRC raised the bad debt provision on the Quinn loans to €1.7 billion in its 2010 half-year accounts and to €2.2 billion in the full-year accounts for that year as Mr Quinn’s financial difficulties mounted. The bank’s chairman Alan Dukes said at the end of April 2011 that the bank may recover less than half of the €2.88 billion owed by Mr Quinn and his family.
Sean Quinn’s wife and children have issued legal action against the bank, claiming they are not liable for €2.34 billion of loans as they were advanced illegally to prop up the bank’s share price. IBRC raised provisions against €9.4 billion of loans due from its top 20 customers by €400 million in the first half of the year, its accounts show. The total provision taken against these loans topped €3.6 billion at the end of June.