Anglo Irish Bank, the dying institution at the heart of Ireland's journey to near bankruptcy, confirmed Thursday an Irish-record 2010 net loss of euro17.7 billion ($25 billion) because of property development loans gone bad.
Anglo originally revealed its expected 2010 figures Feb. 8 and Thursday's audited figures contained only minor revisions. They eclipsed the previous record loss in Irish corporate history _ the euro12.7 billion deficit that Anglo recorded in 2009.
Taken together, the nationalized, state-insured losses at Anglo represent nearly a third of Ireland's surging national debt and underscore Ireland's belief that, had it permitted Anglo to collapse in 2008, it would have taken the entire Irish banking system down with it.
Publication of Anglo's results came hours before Ireland's publication of potential losses at four other Irish banks. Anglo is excluded from that exercise because it was the first, and worst, to go through the process.
Anglo's chief executive, Mike Aynsley, offered one bit of good news Thursday: He believes that Ireland won't need to invest any more money in Anglo beyond the euro29.3 billion it has already committed. If true, this would be the first time since Ireland's banking crisis began in 2008 that a bank's estimated bailout needs weren't raised later.
Aynsley, appointed to oversee the bank's wind-down, described the work to date as cleaning "the scum off the top of the pond."
He cautioned that Anglo could require more cash if the underlying value of its remaining loan book, currently valued at euro27 billion, suffers further heavy falls. Irish land prices have slumped by as much as 80 percent, and commercial properties by 60 percent or more, over the past three years. But analysts say prices at the retail end _ particularly residential property _ are yet to reach bottom.
Anglo said it recorded total loan losses of euro19.3 billion. This included transfers of euro14.1 billion in dud loans to Ireland's "bad bank," the National Asset Management Agency. It has taken control of the largest toxic debts of five Dublin banks, all of which spent a decade funneling foreign money into a runaway Irish property market.
Anglo said it partly offset its 2010 loan losses by forcing its most junior bondholders to accept a euro1.6 billion discount on their investments.
Ireland plans to close Anglo and has already transferred its deposits to other banks. The skeleton of Anglo's partially constructed future corporate headquarters on the north bank of Dublin's River Liffey stands as a symbol of all Anglo's ambitions gone bust.
During the Celtic Tiger boom, Anglo recorded exponential growth as the market's most aggressive lender to an elite of Irish property development barons. Ireland's membership in the eurozone made it much easier for Anglo to borrow funds at low interest rates from foreign banks.
Anglo's former senior executives are now under criminal investigation for a series of accounting scandals designed to hide losses and illicit loans from shareholders.
The deals included secret 2008 loans to 10 top Anglo clients on condition they invested the lot _ euro460 million _ into slumping Anglo shares.
External investigators also caught Anglo trying to hide its massive losses of deposits in 2008 by borrowing billions from another Dublin bank on the eve of its 2008 results, mislabeling the money as new deposit business, then transferring the funds back soon after its annual report was published.