Anglo Irish Bank more than tripled the amount of investment property it added to its own balance sheet in the six months to the end of March despite the severe downturn in the property market. The bank also took an impairment charge of €107m on property joint ventures.
The bank had a total of €293m of investment properties on its balance sheet at the end of March 2009, compared with €108m in the previous six-month period. The bank failed to off-load the properties to its private clients. This investment property never previously contained an impairment up until the latest period.
While it only added €87m of fresh investment properties in the last accounting period (half year to end of September), in the period to the end of March it added €272m. After calculating the future cash flows of the investment properties an impairment of €89m was taken. The bank blamed weakening economic conditions for this impairment.
Anglo's private-clients division was one of the biggest property syndicators in the country during the boom years. It would buy property, often joining up with developers to do so, and then invite its affluent customers to take a stake in the investments.
However, when the property-market bubble burst, they were left holding some property investments which they hadn't been able to syndicate. For example, the bank holds nearly 20% of Arnotts after it failed to sell on the stake and it also has a 50% shareholding in the Opera Centre retail scheme in Limerick which is currently awaiting a planning decision from An Bord Pleanála.