Dutch lender Rabobank has said that it will have to sit out the problems at its Irish operation ACCBank over the next three to five years and continue setting aside large sums of money to cover bad loans.
But the bank said that it had no plans to exit the Irish market. Rabobank said that it was supportive of its Irish business but felt that it would take time to work through the problems at ACC.
The lender today said its net income for last year climbed €2.77 billion, up from €2.21 billion, and that profit at its wholesale and international retail banking units rose 37 per cent to €774 million.
Rabobank chairman Piet Moerland said its bad-loan provisions, which fell by 37 per cent to €596 million last year, mainly came from Rabobank's business in Ireland.
"In Ireland we have to serve out the next three to five years," Mr Moerland said in a statement. "In the meantime we will have to keep provisions at a higher level."
In a statement, the bank sought to clarify the chairman's statement. “Rabobank Group has no plans to exit the Irish market. The bank is fully supportive of its Irish business and its current strategy to alleviate the problems in the ACCBank loan book, a strategy it estimates will take three to five years to achieve."
In August, Mr Moerland told reporters then that the situation in Ireland was bad but that the bank was not considering withdrawing from the market.
“We want to wait it out and try to recover as much as we can,” he said, adding that it could take four to five years before the Irish economy recovers.
But he also joked that if anyone knew of a buyer for ACC, they should let him know.
Additional reporting: Reuters