Anglo to report largest loan loss in history (bond holders face wipeout)

[MsAnneThrope]

Reported in today's Tribune Business supplement (no link yet)

Anglo Irish Bank's bad debt charge, to be disclosed this week when it publishes its half year results, is expected to be the largest loan loss recorded in Irish banking history. The Government will have to inject €2.5 billion into the bank just to prevent it drifting towards insolvency. The ailing property lender is expected to write off approximately €3.5 billion of delinquent loans

Anglo is also going to publish extracts of its new business plan this week, which will end its role in property development lending as part of a "de-risking" strategy. Instead it will assume a new brand identity lending to small and medium-sized businesses

Also, from a related article in the Tribune...

The government is considering effectively wiping out certain classes of bond holders for the first time after advice from fixed income experts and bank executives. The move, which could come as soon as this week when Anglo Irish publishes first-half results, will involve the government not honouring coupon (interest) payments for holders of Tier 1 perpetual bonds in Anglo

I don't suppose there is any chance of us ever finding out who is not honouring their €3.5 billion worth of loans, is there? I guess they are safe in their yachts and golf course villas in the Meditteranean, and will no doubt be first in line for fresh loans, under a new commercial identity, when Anglo starts loaning again. This stinks...

[He3]

Here you go

Anglo to disclose massive property write-down

[FakeViking]

I don't suppose there is any chance us ever finding out who

It's commercially sensitive.

It's political dynamite.

It sucks.

[cactusflower]

Would someone remind me why we bought this bank ?

[FakeViking]

It's systemically important.

To a small group of very rich people who need a bail out. Or should that be dig-out.

[greengoose]

Would someone remind me why we bought this bank ?

To put money into. That's what banks are for!

A truly great investment and we will be earning some colossal interest in time. Trust Brian Lenihan, he's a great legal mind...

[MsAnneThrope]

But why is Anglo saying it will write off the loans now? Are we to assume these debts won't be transferred to NAMA when/if it is set up???

According to the SBP link that He3 posted:

The write downs the bank is likely to take may be as high as €5 billion over two years.

Will NAMA be pursuing this money or are they being left off the hook early???

[Nipper]

This must be linked to indemnity for Anglo directors mentioned in other thread.

[Nipper]

These must be the loans that can be directly linked to Anglo directors so they can walk away with no debt and no liability if sued.

[MsAnneThrope]