Well-known business bank account provider Anglo Irish Bank recently announced that not only were its first half losses were a dismal €8.2 billion (£6.7 billion), it will be in need of further taxpayer bailouts to make good on its obligations.
The bank, which specialised in commercial banking products such as business loans, is already 75 per cent nationalised thanks to a massive bailout at the height of the international banking crisis. Anglo Irish have declared that the total amount of needed funds, after averaging 40 per cent losses on its residential and commercial loans, would be approximately €25 billion to stave off bankruptcy.
Industry experts have commented that the bank’s sorry state is a reflection of the Irish economic landscape, where there was heavy reliance on overinflated property deals just preceding the economic meltdown. Anglo Irish was a major venture capital supplier to several property developers that also received funds in the bailout.
Ireland’s largest telecommunications company Eircom has expressed its concerns by its massive debt, declaring an active review of options it could avail itself of to avoid defaulting on its outstanding loans. Eircom continues to face sales numbers that have been falling, which may make the repayment of its outstanding loans of €342 million problematic. Officials for the company announced that although Eircom has paid down its debt in excess of €560 million since June of 2007, it still has over €3 billion to repay, leading to an estimate that it may be unable to continue repayment in as soon as one year from now.
In further complications, the EU will rule in September as to whether the Irish government will be permitted to continue supplying cash to the troubled bank.
Nevertheless, Anglo Irish has declared that it will indeed be in need of additional funds, the final number depending on not only which direction the Irish commercial property market takes but the performance of the economy as well.