ACCBank has reported losses of €21.8 million (£17.2 million) in 2000 just as the "For Sale" sign goes up on the State-owned institution.
The bank blamed its DIRT settlement with the Revenue Commissioners, higher bad debt provisions and restructuring costs for the losses but stressed there is now a profitable business for a new owner.
Announcing the bank's results yesterday, chief executive, Mr Colm Darling, said the business had been realigned and was trading ahead of expectations in the current year. "Even with the major distractions we had last year, the bank has performed strongly, we have a healthy balance sheet and are well capitalised."
Its corporate advisers, NCB Stockbrokers, are preparing to issue an information memorandum to prospective buyers in the coming days as the sale process formally kicks off.
ACCBank chairman, Mr Padraic O'Connor, said a good level of interest in the bank had been reported by its advisers with more than 10 prospective bidders likely to be sent the initial sale details. He said the bank was expecting to realise a "full" amount from the sale and was optimistic a deal could be finalised by year-end.
"It is obviously very disappointing to be reporting a loss like that given all that has been done. The results show we have addressed everything that needed attention. We have effectively done a vendor's due diligence so a prospective buyer can have comfort coming in here," Mr O'Connor said.
Exceptional charges depressed the pre-tax profit outcome last year but the bank's operating profit, which reflects the underlying performance of the business, increased by 11.4 per cent to €28.4 million. Given current stock market valuations, analysts suggest the bank could fetch between €220 million and €240 million but much will depend on the number of bidders that emerge.
Last year's profits were depleted by a series of one-off costs. These included its €21 million payment to the Revenue Commissioners for DIRT tax arrears and penalties.
The bank has also substantially increased its provisions for bad debts setting aside €14.4 million to cover any losses following a review of its loan book.
The bulk of this is understood to relate to any further costs associated with the development of the Four Seasons Hotel in Dublin. ACCBank was the lead bank in a consortium that lent money for the development of the hotel. It subsequently exceeded its £51 million budget. ACCBank's former chairman, Mr Dan McGing, was associated with the company linked to the development of the hotel.
The bank has now closed its books to corporate banking activities. Mr Darling said following its review, it was now satisfied there would not be any further "headaches" arising from its loan book.
Another substantial cost was the €16.3 million put aside to fund its restructuring costs and voluntary severance scheme. Some 100 of its more than 600 staff are expected to take the voluntary severance package this year with a further 100 factored in over the next two years.
