Irish Nationwide, the property lender and building society, has disclosed that its income has slid by over €235m in just the first five months of the year and "significant additional" provisions for losses on property loans will be required.

Meanwhile a report on the controversial remuneration of former chief executive Michael Fingleton is "expected in the near future".

The society, which is among the seven institutions guaranteed by the Irish state, saw its "interest receivable and similar income" drop by €156.2m in the period between January and May.

There was a €41.1m drop in net interest income and a €38.2m fall in its general income over expenditure.

The society blamed lower returns on liquid funds due to falling interest rates and a general increase in funding costs.

While the figures cover the period from January to the end of May, the society has revealed that the decreases have continued "at broadly the same rate" during the period from June to 29 July.

The building society has not disclosed what its overall financial position for 2009 will be.

The Department of Finance told the Sunday Tribune recently it was confident about the building society's funding, at least for now.

The building society, in an update forwarded to some debt investors, also said: "In light of current market conditions and deteriorating economic circumstances since 31 December 2008, it is likely that significant additional loan loss provisions will be required."

The building society is facing significant capital issues. For example its own funds ratio has fallen below capital requirements demanded by the Financial Regulator. The society said of this:

"The Financial Regulator has been notified and is currently reviewing the matter. Having considered the maximum monetary penalty which could be imposed under the administrative sanctions procedure, the board does not consider this to be a material financial amount."

The building society's board contains two government-appointed directors, Adrian Kearns and Rory O'Ferrall.

These directors are there to "promote the public interest" and they are investigating the pay and conditions of the former chief executive Michael Fingleton.

The director of corporate enforcement, Paul Appleby, is also investigating directors' loans taken out by former Anglo Irish chairman Sean FitzPatrick.

Irish Nationwide's connections with FitzPatrick during this period are expected to form a part of this investigation.

The building society has warned that this investigation could result in material adverse effects on its reputation and operations.