Ireland

Anglo Irish Bank made an €8.2 billion loss for the first six months of the year after writing off €5.8 billion on loans sold or heading for Nama and €2.5 billion on loans remaining at the bank. Provisions and impairments totalling €8.3 billion were offset by an operating profit of €151 million, which left the bank with an €8.2 billion loss for the six-month period. The loss surpassed the previous record set by Anglo last year for the highest loss for a six-month period taken by an Irish company. The bank lost €4.1 billion for the corresponding period last year – the six months to March 2009.

Eircom warned that it could breach the covenants on its €3.8 billion net debt within the next 12 to 18 months as the company’s revenues continue to shrink in the recession, The Irish Times reported. It also wants a reduction in labour costs of €90 million over the next three years to make the business more competitive. This is all against a backdrop of declining sales across the group. Revenues fell by 8.5 per cent in the year to the end of June to just more than €1.8 billion. On a positive note, Eircom trimmed its operating costs by 11.5 per cent.

The High Court has appointed an interim examiner to regional airline Aer Arann. The move gives the company court protection to enable the examiner to implement a restructuring plan, RTÉ Business reported. Michael McAteer of Grant Thornton is to be interim examiner to Comhfhorbairt (Gaillimh), which trades as Aer Arann. A statement from the airline said Mr.McAteer's appointment would not affect day-to-day business and the company would continue to operate as normal. Aer Arann said there would be no impact on customer travel or bookings.

The Belfast Clinic, an upmarket private medical clinic in south Belfast, has been placed into administration, InsolvencyJournal.ie reported. The clinic, which opened just two years ago and was the newest independent private hospital in the North, offers a range of services, including cosmetic surgery, gynaecology and urology. It also boasts state-of-the-art facilities and has 15 private rooms in its premises on the fashionable Lisburn Road in Belfast. The firm experienced financial difficulties, however, following the suspension of the NHS waiting list initiative.

The High Court yesterday gave troubled builder McInerney Homes protection from its creditors in the first case of its kind to involve a business with debts destined for State bad bank, Nama, The Irish Times reported. McInerney has been wrestling with €236 million in debt owed to Irish and British banks since last year, but was close to selling a stake to US-based private equity house, Oaktree Capital, for €40 million, a deal that would have recapitalised the business.

Ireland’s long-term sovereign credit rating was cut one step to AA- from AA by Standard & Poor’s, which cited the projected cost of supporting the nation’s financial sector, Bloomberg reported. “The negative outlook reflects our view that a further downgrade is possible if the fiscal cost of supporting the banking sector rises further, or if other adverse economic developments weaken the government’s ability to meet its medium- term fiscal objectives,” S&P said today in a statement.

Reports have emerged that troubled house builder McInerney Holdings is preparing an application for court protection which would force its lenders to write down its debts. If the petition goes ahead, it could represent a challenge to Nama legislation, InsolvencyJournal.ie reported. Laden down with borrowings of €236 million, McInerney Holdings, one of the country's oldest house builders, is one of the many Irish firms attempting to restructure its debts in a last-gasp effort for survival.

Bank of Scotland (Ireland) is to cease operating as a licensed bank in Ireland following a strategic review of its business here, The Irish Times reported. The company, which is owned by Lloyds Banking Group, will wind down its operations, ceasing to provide working capital and wealth management services by the end of the year, and transferring its existing Irish business to Bank of Scotland in the UK.

New proposals published by the Financial Regulator last week will make it tougher for lenders to seek repossessions and will strengthen the rights of mortgage holders in arrears, InsolvencyJournal.ie reported. The planned changes are part of a proposed reform of the existing code of conduct for lenders and are aimed at easing the situation for more than 32,000 homeowners in arrears. Under the new rules, which are due to be finalised in November, lenders will have to explore all viable options with borrowers in arrears and examine alternative repayment measures.

The bailout of beleaguered building society Irish Nationwide is likely to exceed the original estimated cost of €2.7 billion by up to one-fifth, said Patrick Honohan, governor of the Central Bank, The Irish Times reported. Speaking in Beijing, China, Mr Honohan put the net cost to the Government of recapitalising Anglo Irish Bank at “about €22-€25 billion”, and on top of this, he said, would be added about €4 billion “mainly to cover one small building society”.