In March 2008 Anglo Reported that €10.4bn of their loan book was out to developers . This looked quite prudent , if true . 14% or so of the total loan book .
BY September 2008 that category had risen €5.5bn to €16.9bn .
€16.9bn was 23% of its €74bn Loan Book in September 2008 . However reclassification has continued apace since then .
I have just been told by an ‘FF Accountant’ that the current or recent state of ‘reclassification’ is that over 1/3 of its loan book ( meaning over €25bn ) has been reclassified up to recently as development loans , to which we add directors loans and golden circle crap of at least €1bn .
This means that at least €26bn of its loan book is developer loans/directorial crap and more likely at least €30bn .
These loans are , on aggregate , worth only 1/3 of face value now . Many are loans on development land or on blocks of empty apartments . We also own much of a $250m hole in the ground in Chicago .
That all amounts to a loss of €20bn once we stop dicking around and take the hit …if indeed there is any point in taking a €20bn hit when you could simply let the thing implode under its own weight .
Unnationalise the yoke, as a new bank lets call it The Rubbish Bank. This new bank isn’t included in the Guarantee as it missed the cut off. Bank goes to wall. Golden circle/ FF cronys go to wall or are badly burnt but Sean the Taxpayer is off the hook for the €20bn+.
It is possible , the state was materially and egregiously misled on the overall toxicity of the loan book when it extended the guarantee in late september .
We would not get our recapitalisation money back …that’s somewhere between €1.5-€3bn that we would lose but so what compared to €20bn .
As I keep saying, there is no discernable difference between commercial and C&D in recent years. Once an anchor tenant is secured, as far as I can see, the banks have been reclassifying C&D loans into commercial loans before the site is built and before there is a rental stream. If the anchor tenant pulls out (as a number have done recently), or further funding to complete the site is not being extended (as in the Chicago Spire), the loan is reclassified back.
But the problem is not with C&D. In the Irish context, Commercial has become as risky as C&D and is likely to have much higher default levels than would traditionally be associated with commercial loans.
Arent you forgetting something? The people with the ability to do something about this are addicted to power and driven by greed i.e. the gubberment and this has and will blind them to common sense especially as they share the same attributes shown by the small clique of Iseq company directors in this country in that they believe they and only they can sort this mess out but at the same time forgetting they and their ilk got us here to start with.
Do you get the feeling they won’t find anything useful… I hope not but there has been plenty of time to destroy things. I hope their IT people are good… the trash can may reveal a few golden moments yet!
