Written answers
Wednesday, 16 December 2009
Department of Finance
State Banking Sector
11:00 pm
Christy O'Sullivan (Cork South West, Fianna Fail)
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Question 109: To ask the Minister for Finance the total value of loans provided by Anglo Irish Bank in 2009. [47431/09]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Anglo Irish Bank is run on an arms length commercial basis by the Board.
As with all financial institutions, Anglo's current financial information, including its lending figures, is commercially sensitive, and it would therefore not be appropriate for me to release the information requested by the Deputy. Anglo Irish Bank publishes detailed accounts in line with the requirements for publicly quoted companies, and this will remain the case. The bank's next annual accounts for 2009 will be published in 2010 and will detail the bank's lending figures for the year.
I include for the Deputy's information, a copy of the relevant extract from Anglo's latest published accounts, for the half-year to 31 March 2009, in relation to the bank's customer lending.
| Extract: Customer lending information from Business review, Anglo Irish Bank Corporation Limited Interim report for the six months to 31 March 2009 | |||||||||||
| Customer lending | |||||||||||
| Customer lending balances by division1 | 31 March 2009 | ||||||||||
| €bn | % | €bn | % | ||||||||
| Ireland | 43.3 | 60% | 42.5 | 60% | |||||||
| UK | 18.7 | 26% | 18.5 | 26% | |||||||
| US | 10.3 | 14% | 10.0 | 14% | |||||||
| Total | 72.3 | 100% | 71.0 | 100% | |||||||
| Lending, excluding provisions for impairment, increased by €1.3 billion2 during the period bringing total customer loans pre-impairment to €72.3 billion. The Bank's Ireland division accounts for 60% of all lending with 26% and 14% in the UK and US respectively. Loan balances include €14.4 billion to the Bank's top 20 regulatory customer groups. Each of these groups consists of a number of connected entities and the balances represent multiple individual loans secured by diverse portfolios of assets and multiple contracted cash flows. | |||||||||||
| New lending in the period was solely to the Bank's existing customer base, primarily in Ireland and confined to amounts which were previously committed or approved to protect asset quality and reduce risk. Growth in lending includes an amount of €0.7 billion relating to capitalised interest during the period, which is an integral feature of development lending. Interest roll-up facilities are also being provided to some clients outside the terms of their original loan facilities due to the lack of demand for completed units. The Bank will continue to approve the provision of additional facilities to customers where it is believed this will ensure the best economic outcome for the Bank in the long term. | |||||||||||
| While core lending margins excluding fees have remained broadly stable, total lending margin, including fees amortised to interest income under IFRS, has declined to 2.26% for the six months to 31 March 2009 from 2.43% for the year ended30 September 2008. This reflects a significant decrease in lending arrangement fee amortisation income, from €133 million in the six months to March 2008 to €53 million, due to lower new business volumes and the extension of expected lives of loan facilities resulting in a longer income amortisation period for existing fees. | |||||||||||
| Business review (continued) | |||||||||||
| Divisional lending balances by sector | |||||||||||
| Investment, | |||||||||||
| Business | |||||||||||
| Banking | Commercial | Residential | |||||||||
| & Other | Development | Development | Total | ||||||||
| €bn | €bn | €bn | €bn | ||||||||
| Ireland | 31.6 | 5.7 | 6.0 | 43.3 | |||||||
| UK | 14.0 | 2.4 | 2.3 | 18.7 | |||||||
| US | 9.0 | 0.8 | 0.5 | 10.3 | |||||||
| Total | 54.6 | 8.9 | 8.8 | 72.3 | |||||||
| Investment, business banking and other lending across the Group totals €54.6 billion and comprises investment property lending across all sectors including retail, office, leisure and industrial, together with business lending to the SME and corporate sector and lending for personal investment. | |||||||||||
| Development lending totals €17.7 billion or 24% of the book, inclusive of €10.6 billion of land bank assets. Two thirds of this is lending in Ireland and covers all phases of development from unzoned land to completed units, some of which are contracted for sale or pre-let. | |||||||||||
| At 31 March 2009 committed lending work in progress ('WIP') totalled €4.0 billion (30 September 2008: €6.3 billion). WIP has reduced substantially in the period due to the re-evaluation by both clients and the Bank of previously approved projects taking account of overall economics and liquidity. | |||||||||||
1 Gross of impairment provisions and including lending associated with the Bank's assurance company
Christy O'Sullivan (Cork South West, Fianna Fail)
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Question 110: To ask the Minister for Finance the total value of loans provided by Anglo Irish Bank per year for the past ten years. [47432/09]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As per Anglo Irish Bank's published annual and interim accounts, the total value of loans held by the bank over the last 10 years was as follows:
| Report | Loans and advances to customers |
| Annual report 30 September 1999 | € 5,612m |
| Annual report 30 September 2000 | € 8,304m |
| Annual report 30 September 2001 | €11,522m |
| Annual report 30 September 2002 | €14,296m |
| Annual report 30 September 2003 | €18,076m |
| Annual report 30 September 2004 | €24,390m |
| Annual report 30 September 2005 | €33,600m |
| Annual report 30 September 2006 | €49,142m |
| Annual report 30 September 2007 | €65,949m |
| Annual report 30 September 2008 | €72,151m |
| 6-month interim report 31 March 2009 | €66,638m |
This information was provided by Anglo Irish Bank in its published annual and interim accounts, with the total loan amounts stated at the exchange rates applicable at the relevant date, netting new lending and repayments, and after impairment provisions. Anglo Irish Bank publishes detailed accounts in line with the requirements for publicly quoted companies, and this will remain the case. The bank's next annual accounts for 2009 will be published in 2010 and will similarly set out the bank's total customer lending for the year.
Christy O'Sullivan (Cork South West, Fianna Fail)
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Question 111: To ask the Minister for Finance the average monthly wage bill for Anglo Irish Bank. [47433/09]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Anglo Irish Bank is run on an arms length commercial basis by the Board. As with all financial institutions, Anglo's current financial information, including its wage costs, is commercially sensitive, and it would therefore not be appropriate for me to release the information requested by the Deputy. Anglo Irish Bank publishes detailed accounts in line with the requirements for publicly quoted companies, and this will remain the case. The bank's next annual accounts for 2009 will be published in 2010 and will set out the wage and salary costs for the year. I include for the Deputy's information, a copy of the relevant extract from Anglo's latest published accounts, for the half-year to 31 March 2009, in relation to the bank's administrative expenses.
Extract: Note 8 of the Anglo Irish Bank Corporation Limited Interim report for the six month period to 31 March 2009
| 8 | Administrative expenses | Six months | Six months | Year | ||
| ended | ended | ended | ||||
| 31 March | 31 March | 30 Sept. | ||||
| 2009 | 2008 | 2008 | ||||
| €m | €m | €m | ||||
| Staff costs: | ||||||
| Wages and salaries | 35 | 76 | 143 | |||
| Share-based payment schemes | 31 | 16 | 21 | |||
| Retirement benefits cost | 11 | 7 | 16 | |||
| Social welfare costs | 5 | 10 | 18 | |||
| Other staff costs | 3 | 5 | 8 | |||
| 85 | 114 | 206 | ||||
| Other administrative costs | 50 | 50 | 95 | |||
| 135 | 164 | 301 | ||||
| The decrease in wages and salaries and related social welfare costs from the six month period ended 31 March 2008 reflects a reduction in variable employee compensation, and a fall in average staff numbers from 1,922 to 1,753 primarily due to the disposal of the Bank's Austrian and Swiss private banking businesses. | ||||||
| As required by IFRS 2 the share-based payment expense includes an accelerated charge of €21m which represents all unexpensed accounting charges at the point of extinguishment of all share options and awards. This follows the signing into Irish law of the Anglo Irish Bank Corporation Act 2009 which extinguished all rights granted to employees under the various share-based incentive schemes and transferred any shares held in trust under these plans to the Minister for Finance. The accounting charge for share-based payment schemes is determined by reference to the fair value of options or shares on the date of grant and does not reflect the current value to the recipient which is nil. | ||||||
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