Update: Bad debts haunt Bank of Ireland

A surge in bad debts sent Bank of Ireland deeper into the red in the first half of its current financial year.The bank, which is in the process of negotiation a deal to shunt €16bn of toxic loans into NAMA, the Irish government insurance scheme, posted losses of €979m in the six months to September compared with a profit of €647m. Net income fell to €1.7bn from €2bn.The bank added there remain significant uncertainties as to the final discount to be applied to the loans its puts into NAMA. Bad debt charges jumped by 569% to €1.8bn reflecting a "significant deterioration in asset quality in our property and construction portfolio, primarily landbank and development in Ireland," it said. Deeper recessionary conditions have also had an impact on our non-property SME and Corporate books in Ireland together with our residential mortgage and consumer (unsecured) books, it added."The last twelve months have been very challenging. With the assistance of the Irish Government and through concentrating on our priorities, greater stability has been brought to the Bank," chairman Richie Boucher said."As we face further uncertainties and challenge in the months ahead we will remain focused on our priorities and the clear goals which we have for continuingto make progress on each of these," he added.