Anglo Irish Bank today posted a 37% fall in annual pre-tax profits and warned that it faced a period of lower profitability due to rising impairment charges.

The property lender made pre-tax profits of E784m (£671) in the year to 30 September, but cut its dividend payment.

The profits were affected by impairments which increased from E51m (£44) to E245 (£210m), representing 0.32% of the loan book, and by provisions made to cover potential losses.

It is putting aside E500m (£428m), compared with E31m (£27m) in 2007, in order to cope with increased defaults which made up 1.3% of its loan balance.

It said that it expected most of its losses would arise in its development lending loan book.

The bank also suffered a 34% decrease in earnings per share down to 88.4% and said that it would not be paying a dividend at the end of this year.

Sean FitzPatrick, the chairman, said: ‘The past year has seen the most extraordinary financial upheaval in our lifetime, resulting in the failure of numerous financial institutions.

'Our asset quality, diversified finding platform and resilient capital base place the bank in a strong position to meet the challenges that lie ahead.’

It said that lending had increased by 15% from E9.3bn (£7.95) to E73.2bn (£63m).

Anglo Irish Bank shares fell 17% to E0.77 so far today.

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