INBS reports €3.3 billion net loss

Irish Nationwide recorded a net loss of €3.3 billion last year, due mainly to impaired loan provisions.

The building society, which is receiving a €5.4 billion State bailout, said the 2010 loss was in line with expectations. Some €2.8 billion of the overall loss arose related to discontinued operations, while the remaining €0.5 billion loss arose on ongoing operations, it said.

"The significant losses in both operations were primarily due to provision for impairment losses on the society's loan portfolio and, in particular, the crystallisation of losses on the transfer of commercial loans to NAMA," it said.

Irish Nationwide suffered a 64 per cent discount on €8.5 billion of commercial loans transferred to Nama during 2010. It said an additional impairment loss provision of €2.7 billion was realised on this loan transfer.

"These losses not only reflect the significant deterioration in economic conditions, but also the extent of the society's significant exposure to the commercial property sector and the underwriting decisions of the former management team," it said in a statement today.

Chief executive Gerry McGinn said the building society's focused on "getting to the bottom" of its bad debt issues in 2010. "In particular we concentrated activity on assessing the commercial loans and getting them ready for transfer to NAMA. This process is now largely complete," he said.

He said the new board and management team took steps to address the "serious gaps" in governance and management systems in the past.

The business society is due to merge with Anglo Irish Bank this summer and Mr McGinn said this amalgamation process is now underway.

"We are working with the relevant parties to complete the merger in a timely and orderly manner," he said. "We are keenly aware of the difficult times being faced by many of our borrowers and will work closely with them in the management of their loans."

Earlier this week, the last of the building society's 49 branches closed to the public. The branch closures began on April 14th after the society's €3.6 billion in deposits were sold to Permanent TSB in February.