A SUBSIDIARY of Irish Nationwide Building Society earned €492 on State-guaranteed bonds that the lender issued to itself last year to repay debt falling due before the end of the blanket guarantee.

The building society was the first Irish institution to issue controversial “own-use” bonds to meet a repayment of €4 billion as a result of the Irish banks being shut out of the bond markets.

Irish Nationwide issued the bonds to Pangrove, a subsidiary involved in property development on behalf of the building society, and then bought them back but left €50,000 with the subsidiary.

According to accounts recently filed for Pangrove, the company earned interest of €492 on the €50,000 bonds issued by Irish Nationwide retained by the firm.

The bonds issued by the building society to itself were guaranteed by the Government and then swapped for cash at the European Central Bank to repay bonds due before the expiry of the two-year blanket guarantee on September 29th, 2010.

Pangrove wrote down the value of its properties, which are not identified in the accounts, by €625,000 in 2010 on top of the €1.3 million writedown the previous year.

The properties were valued at €3.55 million at the end of 2010, down from a peak value of €6.9 million at the end of 2007.

The Irish Nationwide subsidiary owned 245,000 shares in a listed company valued at €424,107 at the end of 2010, some €517,964 lower than the value of the shareholding when it was acquired.

The identity of public company is not disclosed. Pangrove had retained profits of €8.3 million and shareholders’ funds of €9.6 million at the end of 2010. Listed under “debtors” were €5.5 million of deposits placed at Irish Nationwide Building Society during the year. Pangrove, with two other Irish Nationwide property companies, Cedarclose and Vernia, was transferred into Anglo Irish Bank last month when the building society was merged into the bank.