Dutch expect to recover less than half of €3.2bn former ACC loans

The remnant of ACC Bank, which eked out a small profit last year for the first time since the onset of the financial crisis, expects that it will ultimately recover less than half of its remaining €3.2 billion loan book as the former State-owned agri lender is wound down.

Dutch financial group Rabobank, which acquired ACC Bank in 2002 before moving the company more into property lending, handed back the Dublin-based bank's licence in 2014 and changed the name of the company to ACC Loan Management. Early last year, ACC Loan Management moved the day-to-day management of all of its loans to outsourcing company Capita.

Bad loan provisions

The latest annual accounts of ACC Loan Management, just filed with the Companies Registration Office, show that the company swung into a €1.3 million after-tax profit last year from a €93 million loss for 2015, as it released €5.6 million of provisions previously set aside for bad loans as the economy improves. It had booked net provisions of €140.9 million for the previous year.

The company, which had a €6.7 billion loan book in 2007, currently has €3.2 billion of loans outstanding. However, it has taken an impairment charge of €1.88 billion against these, indicating that it only expects to recover 41 per cent of largely troubled portfolio.

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The company wrote off €66.2 billion of loans during 2016.

Restructuring

Meanwhile, staff costs fell to €5.66 million last year from €16.2 million, as the number of employees fell from 246 to 82 on the back of a redundancy programme associated with its outsourcing move. The company used up €20 million of restructuring provisions over the course of 2016, according to the accounts.

Founded in 1927 as a state-owned lender called Agricultural Credit Corporation, the company was acquired by Rabobank, the Netherlands's biggest mortgage lender, in 2002. ACCBank was the smallest of the country's biggest 11 lenders before the crash.

ACC Bank had about 470 employees in 2013, before Rabobank decided to relinquish the Dublin-based lender’s licence to focus solely on debt recovery following the property crash.

Meanwhile, Rabobank returned its local banking licence to the Central Bank of Ireland last year as part of a global initiative to reduce costs. Its corporate banking business was transferred to the Irish branch of the group, Rabobank Dublin.

The financial crash also saw other overseas lenders, including Lloyds Banking Group's Bank of Scotland unit and Danske Bank, retreat from the market.