Anglo Irish Bank Shrinks Loss Ahead of Sale, Closure

Anglo Irish Bank said that it has shrank its net loss in the first half of this year, as it hopes to complete the sale of its U.S. loan portfolio, and eventually wind down, Reuters reported. The bank – which faced a slew of scandals during the property crisis – plans to wind down by 2020. Blackstone Group and distressed debt and equity investor Lone Star Funds are among the bidders for the bank’s U.S. commercial real estate loan portfolio, valued at around $9.5 billion.

(Reuters) – Anglo Irish Bank dramatically shrank its net loss in the first half of the year and said on Friday it hoped to complete the sale of its U.S. loan portfolio in the coming months, as it works towards an eventual closure.

Anglo Irish posted a net loss of 105 million euros ($150.7 million) for January through June, a fraction of the 17.65 billion euros loss generated in 2010, a national record, after the company shifted tens of billions of euros of risky property loans off its books.

Anglo Irish’s provisions for the first half reached 778 million euros compared with 4.85 billion a year ago and 7.8 billion at the end of December.

Anglo Irish, once the darling of Ireland’s financial sector, became the poster child for the reckless lending that fuelled the country’s property boom and forced the government into an EU-IMF bailout last year.

The bank’s management, overhauled after a slew of scandals, aims to have the lender closed by 2020 after winding down or selling its loan portfolios in the United States and Britain.

“The work completed by those in the bank, in conjunction with the authorities, since nationalisation has paved the way for an orderly and effective work-out in the best interests of the Irish taxpayer,” Chief Executive Mike Aynsley said in a statement.

“This reflects a major shift in focus for the organisation from being a high-octane lender to an effective asset manager of portfolio sales and redemptions. This will remain our priority.”

The group said it expected the sale of its U.S. commercial real estate loan portfolio, valued at around $9.5 billion, to be completed in the coming months.

Second-round bids for the portfolio — the largest to come up for sale in the United States in recent years — were due on Tuesday.

Private equity group Blackstone Group LP and distressed debt and equity investor Lone Star Funds are among the bidders for the portfolio, sources have told Reuters. ($1 = 0.697 Euros) (Reporting by Carmel Crimmins; Editing by David Holmes)