Irish Bank Losses Rising

Northern Ireland's First Trust Bank has lost £41m, according to the latest financial statement.

The report also detailed how this led to a £28m loss at the parent company Allied Irish Bank group's UK operation.

AIB in The Republic has also reported a pre-tax loss of €872m for the first six months of its financial year.

AIB, trading as First Trust in Northern Ireland, said its "asset quality deteriorated further, mostly in its property portfolios".

The bank said it making more money through lending due to the "re-pricing of customer loans to reflect market conditions."

AIB said its operating environment continues to be extremely difficult and added that First Trust's operating profit, before provisions, was £50m for the first half of 2009.

However, its loss before taxation was £41m because it has had to set aside £91m for loans it doesn't expect to be repaid.

It said this reflected the "deteriorating conditions in the Northern Ireland economy."

Net interest income was 16% lower than the same period last year reflecting a combination of lower interest rates and increased competition.

There have already been cut-backs. Staff costs at First Trust have fallen by 13% in past six months which the bank said is due to a reduction in staff numbers along with a freeze on pay increases and "a strong focus on discretionary expenditure."

HSBC and Barclays in Britain were able to get a boost from buoyant investment bank earnings in their recent figures, but Allied Irish did not, with its revenues from asset management, investment banking and wealth management all down.

Meanwhile, one of the UK's other top banking groups, Lloyds has today announced losses of £4 billion in the first six months of this year.

The bank, which was part-nationalised, has identified the large number of bad debts at HBOS, which it took over in September 2008, has a factor in the huge losses.

See: Lloyds Announces £4 Billion Loss

(BMcC/KMcA)