Commercial Finance Specialists

The collapse of the commercial property market has been blamed for Irish Nationwide's huge financial losses in the last year.

Poor commercial property investment decisions have been blamed for Irish Nationwide's loss of €2.5 billion (£2.18 million).

The losses for the last fiscal year were blamed on the collapse of the commercial property markets in the UK and Ireland.

However, the building society has admitted that the root cause was a "clearly flawed" business model and poor decision making.

This allowed it to over-stretch in the commercial development market and leave itself with "unprecedented" levels of impaired loans.

"We have conducted a detailed analysis of the assets of the society and have created a fundamental change in the way the Irish Nationwide Building Society is managed ensuring that robust corporate governance is in place," said Irish Nationwide's chief executive Gerry McGinn.

The building society has been guaranteed €2.7 billion (£2.35 million) of taxpayer money to help re-capitalise and deal with the debts.

According to market analysts Investment Property Databank, commercial property is recovering from the recession, with the UK market seeing its best growth in 22 months.

Posted by Allan Flowers.