Friday, April 2, 2010

Scope for Anglo Irish Bank to become a ‘business bank’ very slim

Anglo Irish Bank An objective cited for bailing out Anglo Irish Bank and committing €22 billion to date is that Anglo would become a business bank in due course.  But, of course, AIB and Bank of Ireland will also need to become business banks, even if operating on a diminished scale.  What scope is there for all three to be ‘business banks’?

Anglo reported a loss of €12.7 billion on a loan book of €72.1 billion – all property related, including hotels and restaurants.  How realistic is the proposition that a bank where the average remuneration by employee is over €88,000 per annum but where the loss per employee exceeds €7.5 million become a business bank?  The patron of Anglo Irish Bank since nationalisation, the Department of Finance, employs 634 civil servants whose average pay in 2010 will be €55,678

The scale of borrowing by Irish residents  in areas outside construction, property development, hotels / restaurant  and residential mortgage lending is:

 

€ Million

June 2009 Sep 2009
Agriculture and Forestry 5,341 5,210
Fishing 381 374
Manufacturing 7,821 7,559
Electricity, gas and water supply 1,015 1,100
Wholesale trade and repairs 13,236 12,965
Transport, storage and communications 3,283 3,225
Financial institutions 86,181 86,206
Education – schools and colleges 823 856
Health and social work 2,638 2,660
Community, charity, social 2,926 2,843
Personal finance for investment 2,659 2,726
Other personal finance 19,210 17,638
  €145,514 €143,362
Mortgages, property development, construction, hotels and restaurants
€240,876

€233,886
Total borrowing by Irish residents €386,390 €377,248
  (62%) (62%)
Anglo Irish Bank 15 Months to 31 Dec 2009 Year to 30 Sep 2008
Staff costs €186 million €206 million

Average number employees

1,681 1,864
Average cost per employee €110,648 €110,515
(Loss) / Profit for period (€12,702 million) €664 million
(Loss) / Profit per employee €7,560,381 €356,223
 
 
 

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