Anglo Irish Bank has sold nearly €400m of loans on its US books in recent weeks at levels above impairment, meaning it can take "something back out of the provisions", chief executive Mike Aynsley said. He would not be drawn on the nature of the loans but the bank put €350m of loans on New York hotels on the market in June.

Anglo last week announced record losses of €8.2bn for the first six months of last year, most of it related to commercial property loans in Ireland. Aynsley said he was concerned Bank of Scotland Ireland would drag the property market down if it sells off its property loan book at a significant discount.

"You're either a supporter of a scorched-earth policy or you're not. There's a lot of evidence around, supported by the smarter players in the market, that that's not a very productive thing to do, otherwise you'd sell the whole frigging thing up now to the vulture funds and hedge funds at 10c in the dollar," he said.

Senior management insist that a good bank-bad bank split would benefit the taxpayer and stop further losses. Closing the bank was "like the certainty of death but we prefer the uncertainty of life over the certainty of death", said chief financial officer Maarten van Eden.

He said closing the bank, even over a 10-year period, would result in funding running out the door. "You will therefore have to substitute funding and then you can only sit there and pray that the markets recover in the longer term. You will get something back but you will get less back than when you were sitting there managing the portfolio on a going concern," he said.

Van Eden also said that under the proposal to split the bank, some of Anglo's subordinated debt would be transferred to the good bank. "Some of the lower tier 2 may go to the good bank because there's a use for it there to round out the capital structure. It may. But no decision has been made on that. It's part of the restructuring negotiations," he said. They refused to comment on whether a debt buyback is planned.

Aynsley said Anglo's good bank was needed to provide competition and to prevent overconcentrations of risk at Bank of Ireland and AIB.

"We have every foreign bank in town, either closing branches and leaving the country, or closing branches and restricting their business severely, or wanting to leave the country if they could get a buyer," he said.

Notes to the accounts show the bank's discount on its tranche 2 loans sent to Nama was 66% and not the 62% ann­ounced by the agency. The discrepancy arose because "there was a particular group of loans that should have been in tranche 1 that ended up being handled separately in June between us and another bank so there was tranche 1 at 55% and then there was tranche 1a which was super high-quality stuff – it's gone across at virtually no haircut, and then there was tranche 2," Aynsley said.