National Irish Bank has reported a pre-tax loss of €49 million for the nine-month period to the end of September.
The loss includes a €94 million loan impairment charge, largely arising from the bank's lending to property developers. This compares to an impairment of €8 million for the same nine-month period in 2007.
It said the value of loans now receiving intensive risk management had risen to over €700 million by the end of September, compared with €178 million at the end of the third quarter last year.
Overall income rose €12 million to €145 million while costs were €14 million lower over the period at €100 million. Deposits increased from €3.127 billion to €3.434 billion.
In a statement this morning NIB said the impairment charges reflecting "the very sharp downturn in economic and market conditions together with the outlook for continuing difficult conditions. Most of the loan impairment charges related to provisions while actual loan write-offs amounted to €3.8 million (0.05 per cent of average loans)."
At the end of September NIB's overall loan book stood at €10.5 billion, up from €8.9 billion over the same period in 2007.
Around 16 per cent of NIB's loan book is to the property development and construction sectors and this area has suffered the majority of the impairments.
Andrew Healy, CEO, National Irish Bank said: "The Irish economy's decline has accelerated over recent months and the outlook for the next 18 months is not good.
"That is the reality and we have therefore taken a substantial increase in loan impairment charges during this quarter." He described conditions in local and international financial markets as unprecedented.
In the residential market NIB said 37 per cent of its mortgages had an average loan to value of less than 55 per cent. It said less than 100 residential mortgages were in arrears. The bank added that it had not offered 100 per cent mortgages and had "no involvement in the subprime sector".
Mr Healy said the net loss of €49 million "should be seen in the context of Danske Bank Group's overall net profit before tax of €1.3 billion."
He added that the group and NIB customers were fully covered by the Danish Government Guarantee Scheme.
