Losses at ACCBank narrow as it gains from position in Rabobank Group

LOSSES AT ACCBank narrowed significantly last year as the bank benefited from its position in the Rabobank Group to reduce its pretax losses by 20.5 per cent to €186 million.

However, the bank noted that the environment remained “challenging” and it continued to reduce its loan book.

In the 12 months to December 31st, 2011, pretax losses fell from €234 million in 2010, as the bank, which is a wholly owned subsidiary of the Rabobank Group, “continued to make progress in addressing the issues it faces as a result of the ongoing recession in Ireland and the lack of liquidity in the market”.

ACCBank reduced the impairment charge on its loan book in 2011, down to € 222 million from €262.6 million in 2010. However, total provisions rose to €1.1 billion, up from €922 million in 2010.

The bank’s total income fell by 14 per cent to €101 million due to the “negative impact of the significant increase in impaired loans over the last four years”, although this was offset in part, the bank said, by the benefit of lower funding costs available from Rabobank.

At the end of the year, outstanding loans stood at € 4.3 billion, down from €4.9 billion at the end of 2010. The bank also saw its asset position weaken, down from €5.3 billion in 2010 to €4.9 billion as of the end of 2011.

Kevin Knightly, chief executive of Rabobank’s operations in Ireland, noted that the short-term outlook for the bank remained “challenging”, but added that being part of the Rabobank Group enabled it to “pro-actively engage with customers in difficulty while at the same time serving the needs of those who are less impacted by the recession”.

Mr Knightly said the bank would continue to focus on addressing the issues in its loan book, while also concentrating on its core strengths in the food and agriculture sector.

ACC also indicated that it had a deficit in its defined benefit pension scheme of € 39 million.