Anglo Irish Bank is run on an arms length commercial basis by the Board.
As with all financial institutions, Anglo's current financial information, including its lending figures, is commercially sensitive, and it would therefore not be appropriate for me to release the information requested by the Deputy. Anglo Irish Bank publishes detailed accounts in line with the requirements for publicly quoted companies, and this will remain the case. The bank's next annual accounts for 2009 will be published in 2010 and will detail the bank's lending figures for the year.
I include for the Deputy's information, a copy of the relevant extract from Anglo's latest published accounts, for the half-year to 31 March 2009, in relation to the bank's customer lending.
Extract: Customer lending information from Business review, Anglo Irish Bank Corporation Limited Interim report for the six months to 31 March 2009
Customer lending balances by division1
|
31 March 2009
|
30 September 20092
|
|
€bn
|
%
|
€bn
|
%
|
Ireland
|
43.3
|
60
|
42.5
|
60
|
UK
|
18.7
|
26
|
18.5
|
26
|
US
|
10.3
|
14
|
10.0
|
14
|
Total
|
72.3
|
100
|
71.0
|
100
|
Lending, excluding provisions for impairment, increased by €1.3 billion2 during the period bringing total customer loans pre-impairment to €72.3 billion. The Bank’s Ireland division accounts for 60% of all lending with 26% and 14% in the UK and US respectively. Loan balances include €14.4 billion to the Bank’s top 20 regulatory customer groups. Each of these groups consists of a number of connected entities and the balances represent multiple individual loans secured by diverse portfolios of assets and multiple contracted cash flows.
New lending in the period was solely to the Bank's existing customer base, primarily in Ireland and confined to amounts which were previously committed or approved to protect asset quality and reduce risk. Growth in lending includes an amount of €0.7 billion relating to capitalised interest during the period, which is an integral feature of development lending. Interest roll-up facilities are also being provided to some clients outside the terms of their original loan facilities due to the lack of demand for completed units. The Bank will continue to approve the provision of additional facilities to customers where it is believed this will ensure the best economic outcome for the Bank in the long term.
While core lending margins excluding fees have remained broadly stable, total lending margin, including fees amortised to interest income under IFRS, has declined to 2.26% for the six months to 31 March 2009 from 2.43% for the year ended 30 September 2008. This reflects a significant decrease in lending arrangement fee amortisation income, from €133 million in the six months to March 2008 to €53 million, due to lower new business volumes and the extension of expected lives of loan facilities resulting in a longer income amortisation period for existing fees.
Divisional lending balances by sector
|
Investment, Business Banking & Other
|
Commercial Development
|
Residential Development
|
Total
|
|
€bn
|
€bn
|
€bn
|
€bn
|
Ireland
|
31.6
|
5.7
|
6.0
|
43.3
|
UK
|
14.0
|
2.4
|
2.3
|
18.7
|
US
|
9.0
|
0.8
|
0.5
|
10.3
|
Total
|
54.6
|
8.9
|
8.8
|
72.3
|
Investment, business banking and other lending across the Group totals €54.6 billion and comprises investment property lending across all sectors including retail, office, leisure and industrial, together with business lending to the SME and corporate sector and lending for personal investment.
Development lending totals €17.7 billion or 24% of the book, inclusive of €10.6 billion of land bank assets. Two thirds of this is lending in Ireland and covers all phases of development from unzoned land to completed units, some of which are contracted for sale or pre-let.
At 31 March 2009 committed lending work in progress ('WIP') totalled €4.0 billion (30 September 2008: €6.3 billion). WIP has reduced substantially in the period due to the re-evaluation by both clients and the Bank of previously approved projects taking account of overall economics and liquidity.
1Gross of impairment provisions and including lending associated with the Bank’s assurance company.