EBS is expecting to break even for its 2009 financial year despite ongoing aggressive write-downs on its property development and commercial finance books. Results for the half-year are due tomorrow.

This result would be a huge improvement for the mutual, which booked a €38m loss for 2008 as bad debts in its €500m development book accelerated rapidly in the second half of the year. However, its interim results for the half-year to 30 June are expected to show a negligible loss because of ongoing difficult conditions.

The building society will continue its policy of aggressive loan-loss provisioning, albeit less severe than the 13.7% up-front provision of €69m it took on development loans in its annual figures for last year. In proportional terms, EBS has taken the highest provision of all the institutions covered by the government guarantee.

It is understood EBS will take a smaller relative provision tomorrow, in line with its stated plan to provide for a 37% loss over three years on development loan values, in addition to equity losses.

Senior EBS sources indicated these losses were "more theoretical" than actual, given that Nama will probably remove at least some of the bad debt by the end of the year, crystallising the losses all at once. EBS chief executive Fergus Murphy said last month that Nama will take approximately €800m in troubled assets from the building society. Murphy, the only Irish bank chief still in his job after a year of trauma for the sector, has been reducing EBS's exposure to commercial banking since taking over in 2008.

Last Thursday, Murphy told brokers and EBS staff that Haven, its mortgage broker business, was being restructured with the loss of its executive director, Tony Moroney, who failed to win re-election to the EBS board at the agm in early summer. Haven is reportedly operating at 20%-25% of its predicted volumes and its infrastructure is being downsized, although EBS has improved its share of the mortgage market this year as many competitors have withdrawn.

Meanwhile, it has emerged that EBS is planning a covered bond issue in early 2010 following Bank of Ireland's successful AAA-rated €1.5bn fundraising last week.