Anglo Irish Asset Finance PLC 2008 Accounts

Company No.
3091082
ANNUAL REPORT AND FINANCIAL STATEMENTS
ANGLO IRISH ASSET FINANCE PLC

I
YEAR ENDED 30 SEPTEMBER 2008
*L8AE88GD*
LD2 25/03/2009 218
COMPANIES HOUSE
Contents
Corporate information
Directors' report
Statement of directors' responsibilities
Management report
Auditors' report
Income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements

Directors
B Linehan
D Quilligan
F G Parker
J Brydie (appointed 19 March 2008)
T P Walsh (appointed 19 March 2008)
D Murray (resigned 22 May 2008)
Secretary
F G Parker
Auditors
Ernst & Young LLP

1 More London Place
London, SE1 2AF
Bankers
Anglo Irish Bank Corporation Limited

10 Old Jewry
London
EC2R 8DN
Barclays Bank ptc

London Corporate Banking
PO Box 544
Lombard Street
London, EC3V 1EX
Registered office
10 Old Jewry
London
EC2R 8DN
Registered number
3091082
REPORT OF THE DIRECTORS
The directors present their report and the audited financial statements for Anglo Irish Asset Finance pic ('the Company")
for the year ended 30 September 2008.
1. PRINCIPAL ACTIVITIES
The Company continues to provide commercial finance to businesses and individuals supported by real estate and
lease finance and hire purchase facilities.
2. PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the Company relate to the credit, liquidity, market, operational and
compliance risks associated with its lending activities and capital markets funding instruments. Further details on these
risks are set out in the Management Report, while manangement of these risks is set out in Note 24 of the audited
financial statements.
3. RESULTS FOR THE YEAR AND STATE OF AFFAIRS AS AT 30 SEPTEMBER 2008

The results for the year and the balance sheet at 30 September 2008 are set out on pages 11 and 12.
The loss after taxation for the year amounted to £83m (2007: profit £17m). This loss reflects higher
provisioning levels along with foreign exchange losses incurred on the Yen financing arrangement (See Note 5).
Total equity amounted to £234m as at 30 September 2008 (2007: £317m).
The Management Report contains a further review of the performance of the Company.
4. DIVIDEND
The directors do not propose the payment of a dividend in respect of the year ended 30 September 2008 (2007: £ Nil).
5. FUTURE DEVELOPMENTS
The directors will continue to closely monitor the performance of the Company, more details of which are set out
in the Management Report.
6. DIRECTORS AND SECRETARY

Brian Linehan, Declan Quilligan and Gordon Parker continued to serve as directors throughout the year.
James Brydie and Thomas Walsh were appointed directors on 19 March 2008. All directors will continue in
office in accordance with the articles of association. David Murray resigned as director on 22 May 2008.
Gordon Parker served as secretary throughout the year. The directors and secretary had no interests
in the shares of the Company during the year.
2
REPORT OF THE DIRECTORS (Continued)
7. FINANCIAL INSTRUMENTS
The directors of the Company utilise various financial instruments in the normal conduct of the Company's business,
primarily in order to mitigate the interest rate risk arising from the Company's operations. It is the Company's policy to
hedge all Capital Market instruments which are raised at a fixed rate of interest in order to match the income from
lending assets which is normally linked to 3 month LIBOR /EURIBOR. Further details on these risks and the Company's
exposure to financial instruments is given in Note 24 to the financial statements.
8. DISCLOSURE OF INFORMATION TO THE AUDITORS

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit
information, being information needed by the auditor in connection with preparing its report, of which the auditor is
unaware. Having made enquiries of fellow directors, each director has taken all steps that he is obliged to take as a
director in order to make himself aware of any relevant audit information and to establish that the auditor is aware of
that information.
9. GOING CONCERN
Anglo Irish Bank Corporation Limited, the ultimate parent undertaking, has agreed to provide financial support to the
Company as would be required to allow the Company to meet its future obligations as they fall due for at least 16 months
from the date of signing the balance sheet and for the foreseeable future.
10. INDEPENDENT AUDITOR

A resolution for the reappointment of Ernst & Young LLP as auditors of the Company is to be proposed at the
forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD.
REGISTERED OFFICE:
F. G. Parker
10 Old Jewry Company Secretary
London
EC2R 8DN Date: 05 March 2009
3
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE

DIRECTORS' REPORT AND FINANCIAL STATEMENTS
The directors are responsible for preparing the annual report and the financial statements in accordance with
applicable United Kingdom law and International Financial Reporting Standards (IFRS) as adopted by the European
Union.
Company Law requires the directors to prepare financial statements for each financial year which give a true and fair
view of the state of affairs of the Company and of the profit and loss of the Company for that year. In preparing those
financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
- provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable users
to understand the impact of particular transactions, other events and conditions on the entity's financial position and
financial performance; and
- state that the Company has complied with IFRS, subject to any material departures disclosed and explained in the
The directors are required to prepare the financial statements on the going concern basis, unless it is not appropriate. The
directors have received confirmation from the ultimate parent undertaking, Anglo Irish Bank Corporation Limited, of its
continued financial support to allow the Company to meet its future obligations as they fall due for at least 16 months from
the date of signing the balance sheet and for the foreseeable future and consequently the financial statements continue
to be prepared on the going concern basis.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and which enable them to ensure that the financial statements comply with the
Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard
the assets of the Company and to prevent and detect fraud and other irregularities.
The directors confirm that, to the best of their knowledge, they have complied with these requirements in preparing the
financial statements, including preparation of these financial statements in accordance with IFRS as adopted by
the European Union. Under applicable laws and regulations, the directors also have responsibility for preparing a
Directors Report, as set out on pages 2 to 3 that complies with that law and those regulations.
DTR 4.1.5 of the Disclosure Rules and Transparency Rules of the Financial Services Authority requires the directors to
include a management report in the financial statements which includes a fair review of the issuers' business as well as a
description of the principal risks and uncertainties faced by the Company.
As required by DTR 4.1.12 of the Disclosure Rules and Transparency Rules of the Financial Services Authority the
directors (as listed below) confirm that to the best of their knowledge:
- the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial
position and loss of the Company; and
- the management report includes a fair review of the development and performance of the business and the position of
the Company, together with a description of the principal risks and uncertainties that the Company faces.
Brian Linehan - Director

Declan Quilligan - Director
Gordon Parker - Director and Company Secretary
James Brydie - Director
Thomas Walsh - Director
4
MANAGEMENT REPORT
1. REVIEW OF BUSINESS PERFORMANCE

This review covers the year to September 2008 and includes commentary on key areas of performance of the
Company during that period.
Key results for the year include:

- Net loss after tax of £83m for the year, down from profits of £17m in 2007
- Net interest income up 42% from £79m to £112m
- Trading losses of £100m primarily incurred on a Japanese Yen financing arrangement which were more than
eliminated through the structure of the arrangement across various UK group companies of the ultimate parent,
Anglo Irish Bank Corporation Limited
- Specific impairment charge of £58m, 1.29% of average loan book
- Collective impairment charge of £67m, 1,49% of average loan book
- Growth in net customer lending of £805m, an increase of 20%
- Impaired loans represent 4.09% of closing loan book
- Increase in loans and borrowings of £585m, an increase of 26%
Lending and asset quality 2008 2007

£m_ £m
Loans and advances to customers 4,793 3,988
Net loan growth of £805m, which primarily consisted of drawdowns on prior year commitments, brought total customer
lending to £4,793m at year end, a 20% increase on prior year. In keeping with the Company's relationship based lending
model, lending activity during the year was provided solely to the Company's longstanding and experienced
customer base. The Company provides commercial finance to businesses and individuals supported by real estate
and lease finance and hire purchase facilities.
The Company is a traditional balance sheet lender, directly originating assets rather than participating in transactional
or bought in loans. The risk management function of the ultimate parent company, Anglo Irish Bank Corporation
Limited, review loans with the Company's lending teams at least twice yearly to monitor asset quality. The responsibility
for loan performance rests with the relevant lending director and their team.
The rapid worsening of the economic environment in the latter part of 2008 has led to increased specific impairments.
In addition, the collective impairment provision has increased considerably recognising the significant economic
challenges existing at the year end and is determined in line with the detailed policy set out on page 18. Cumulative
balance sheet provisions as at 30 September 2008 total £145m which amounts to 2.94% of the closing loan book.
The Company's loan book of £4,793m at 30 September 2008 is 57% secured on commercial property,
35% secured on residential property and 8% other secured lending. Over 80% of the loan balances at year end are
rated as satisfactory or above. Of the balance, 4.09% is impaired.
The economic outlook has become increasingly challenging and continues to deteriorate. No significant
improvement is anticipated over the next number of years.
The following are the key highlights regarding asset quality at the year end date:
2008 2007
Income Statement: £m £m
Specific provision charge 58 42
Collective provision charge 67 5
Total lending impairment charge 124 47
% of average loan balances 2.76% 1.16%
5
MANAGEMENT REPORT (Continued)
1. REVIEW OF BUSINESS PERFORMANCE (continued)
Lending and asset quality (continued)

2008 2007
Balance Sheet: £m £m
Impaired loans 202 115
% of closing loan balances 4.09% 2.84%
Specific provision 68 50
Collective provision 77 10
Total provisions 145 60
Total provisions as a % of impaired loans 71.78% 52.17%
Trading losses
In May 2008 the Company entered into a Japanese Yen financing arrangement to enable the parent company,
CDB (UK) Limited, and therefore the ultimate parent company, Anglo Irish Bank Corporation Limited, to avail of low
cost financing on an after tax basis at Yen interest rates. The Company incurred foreign exchange losses of £ 101m
on this transaction. The losses to the Company on foreign exchange in the period on this financing transaction are
reduced by £76m of translation gains across various UK group companies of the ultimate parent, Anglo Irish Bank
Corporation Limited ("UK group"), and by a reduced taxation charge in the UK group resulting in an overall increase
in profits after tax for the UK group of £5m.
Loans and borrowings 2008 2007

£m_ £m
Loans and borrowings 2,826 2,241
Loans and borrowings increased by 26%, in line with the increase in the loan book, to total £2,826m. All loans
and borrowings are sourced from the ultimate parent undertaking or other group entities.
Subordinated liabilities and other capital instruments

There were no further issuances of subordinated liabilities or other capital instruments during the year. Full details of
these are given in Note 20.
2. PRINCIPAL RISKS AND UNCERTAINTIES

The Company is subject to a variety of risks and uncertainties in the normal course of its business activities.
The Board of Directors have ultimate responsibility for the governance of all risk taking activity and have established
a framework with its ultimate parent, Anglo Irish Bank Corporation Limited, to benefit from the various risk functions of
the ultimate parent which monitors all risks of the Company as part of the overall risk framework of Anglo Irish Bank
Limited and its group companies ("AIBC Group"). Further details are given in Note 24 of the financial statements.
The principal business risks faced by the Company are outlined below.
Economic environment
The Company's business is primarily affected by economic conditions in the UK and to a lessor extent a number
of European countries, where the majority of earnings are generated. Each of these economies is currently in
recession. Higher unemployment, reduced consumer and business confidence and a contraction in housing markets
have all contributed to declining economic growth.
6
2. PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Economic environment (continued)

The Company, with the assistance of its ultimate parent, assesses customers by reference to their financial strength,
the nature of their underlying business and the quality and certainty of their cash flows. A sustained deterioration
in economic conditions will impact borrowers' ability to service debts. This, combined with a fall in value of underlying
collateral, will adversely impact credit quality resulting in an increased level of defaults and higher impairment charges.
To minimise the impact of this, the Company through the policies of its ultimate parent and the various risk functions
of the ultimate parent, has underwriting criteria and controls in place which will limit the extent of losses arising
in the event of default.
As outlined in the Management Report, actively managing asset quality and controlling credit exposure
are key priorities for the Company and its ultimate parent.
Global financial markets and funding risk

The Company relies on its ultimate parent, to provide all funding requirements to enable the Company to operate.
Anglo Irish Bank Corporation Limited has confirmed to the directors that it will continue to provide financial support to the
Company for the foreseeable future.
Market risk
Market risk has increased globally due to recent volatility in interest and exchange rates. Changes in interest rates and
spreads may affect the interest rate margin realised between lending and borrowing costs. This risk is largely mitigated
by the fact that almost all the Company's lending assets and funding liabilities are priced off market related rates, with no
asset pricing tied to official central bank rates. This ensures there is no structural interest rate pricing basis risk inherent
in the Company's balance sheet.
The Company incurs foreign exchange risk on the Japanese Yen financing arrangement which is set off against gains
across various UK group companies which are integral to the overall operation of this transaction, which is beneficial to
the results of the UK group and the ultimate parent group.
Other risks
Operational risk represents the risk that failed or inadequate processes, people or systems, or exposure to external
events could result in unexpected losses. The risk is associated with human error, systems failure, and inadequate
controls and procedures.
The Company must at all times comply with all relevant laws and good practice guidelines. Non compliance can give rise
to reputational loss, legal or regulatory sanctions or material financial loss.
3. IMPORTANT EVENTS SINCE THE YEAR END AND FUTURE DEVELOPMENTS
Nationalisation of ultimate parent company

On 15 January 2009, the Irish Government announced its intention to take Anglo Irish Bank Corporation pic ("the
Bank"), the ultimate parent undertaking of the Company, into State ownership. The Bank's shares were subsequently
suspended from trading on the Irish and London Stock Exchanges on 16 January 2009. The Anglo Irish Bank
Corporation Act 2009 which provided for the transfer of shares of the Bank to the Irish Minister for Finance, was signed
into Irish law on 21 January 2009. On the same date the Bank was re-registered as a private company and its name
was changed from Anglo Irish Bank Corporation pic to Anglo Irish Bank Corporation Limited.
7
3. IMPORTANT EVENTS SINCE THE YEAR END AND FUTURE DEVELOPMENTS (continued)
Share capital
On 18 November 2008 the authorised share capital of the Company was increased to £3,300m by the
creation of 3,000,000,000 ordinary shares of £1 each. On the 18th November 2008, 1,000,000,000 ordinary shares
were issued at par and subscribed by CDB(UK) Limited, the parent company.
Japanese Yen financing arrangement

Details are given in Note 5 of the audited financial statements, of a financing arrangement, entered into in
May 2008, whereby the Company exchanged a portion of its funding from a Sterling basis to a Yen basis. The
arrangement was structured such that the UK group and therefore the ultimate parent, Anglo Irish Bank
Corporation Limited would benefit from the differential between Sterling and Yen interest rates and the potential
downside from a foreign exchange risk perspective was mitigated by an offset on the UK group's taxation line. The
arrangement had a positive impact on the UK group's and therefore the ultimate parent's profit for the year ended
30 September 2008. Although the arrangement was unwound in early January 2009, the strengthening of Yen
against Sterling post year end has negatively impacted trading income from foreign exchange contracts by £611m
for the Company, which is reduced by related foreign exchange gains in other UK group companies of £455m,
resulting in a net negative impact in profit before tax of the UK group and therefore the ultimate parent of £156m.
The foreign exchange translation related to this arrangement may be offset by a reduction in the UK group's
taxation charge in 2009 and future years.
Impairment
The key economic indicators in the UK, the Company's principal operating market, have continued to show
a marked deterioration since 30 September 2008. This economy is expected to contract further in 2009 and
it will take some time before any improvements as a result of monetary actions are reflected. As a result,
the Company anticipates that loan impairment charges will increase in 2009 and subsequent years.
4.FUTURE DEVELOPMENTS
The directors will continue to closely monitor the performance of the Company.
The directors intend that the Company will continue to provide lending to business secured upon assets in the
United Kingdom and in Europe. The Company has future comitments to lend of £703m (2007: £1,703m)
to be funded by further facilities from Anglo Irish Bank Corporation Limited - London branch. However this will
be closely managed in the current very uncertain environment to ensure that only critical lending is advanced,
in order to mitigate the Company's credit risk.
5. FINANCIAL RISK MANAGEMENT

The directors of the Company utilise various financial instruments in the normal conduct of the Company's
business, primarily in order to mitigate the interest rate risk arising from the Company's operations. It is the
Company's policy to hedge all Capital Market instruments which are raised at a fixed rate of interest in order to
match income from lending assets which is normally linked to 3 month LIBOR /EURIBOR. Risk management
oversight for the Company is provided by the Risk Management function of Anglo Irish Bank Corporation
Limited. Credit risk decisions are made on behalf of the Company by the Anglo Irish Bank Corporation
Limited Credit Committee function. Further details on these risks and the Company's exposure to financial
instruments is given in Note 24 of the financial statements.
8
IIIIH111 =!L ERNST &YOUNG Ernst & Young LLP
1 More London Place
London SE1 2AF
Tel: 020 79512000
Fax: 020 7951 1345
www.ey.com/uk
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF

We have audited the Financial Statements of Anglo Irish Asset Finance Pic for the year ended 30 September
2008 which comprise the Income Statement, the Balance Sheet, and the statement of Changes in Equity,
the Cash Flow Statement, and the related notes 1 to 32. These Financial Statements have been prepared on
the basis of the accounting policies set out therein.
This report is made solely to the Company's members, as a body, in accordance with Section 235 of the
Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's
members those matters we are required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company's members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of Directors and Auditors
The Directors' Responsibilities for preparing the Financial Statements in accordance with applicable United
Kingdom law and International Financial Reporting Standards (IFRSs) as adopted by the European Union
are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing {UK and Ireland).
We report to you our opinion as to whether the Financial Statements give a true and fair view and are
properly prepared in accordance with the Companies Act 1985. We also report to you whether the
information given in the Directors' Report is consistent with the Financial Statements.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we
have not received all the information and explanations we require for our audit, or if information specified by
law regarding Directors' remuneration and transactions with the Company is not disclosed.
We read the Directors' Report and consider whether it is consistent with the audited financial statements.
We consider the implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by
the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the Financial Statements. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of the Financial Statements, and of
whether the accounting policies are appropriate to the Company's circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
Financial Statements are free from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
Financial Statements.
The UK firm Ernst & Young LLP is a limited liability

partnership registered in England and Wales with
registered number OC300001 and is a member firm of
Ernst & Young Global Limited. A list of members' names
9 is available for inspection at 1 More London Place,
London SE1 2AF. the firm's principal place of business
INVESTOR IN PEOPLE and registered office.
Ill"""'
Ernst & Young LLP
=H ERNST&YOUNG 1 More London Place
London SE1 2AF
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF Tel: 020 7951 2000
ANGLO IRISH ASSET FINANCE PLC (Continued) Fax: 020 7951 1345
www.eY.com/uk
Opinion
In our opinion:
- the Financial Statements give a true and fair view, in accordance with IFRSs as adopted by the European
Union, of the state of the Company's affairs as at 30 September 2008 and of its loss for the year then ended;
- the Financial Statements have been properly prepared in accordance with the Companies Act 1985; and
- the information given in the Directors' report is consistent with the Financial Statements.
5
\Syn/\SV V - M
Ernst & Young LLP

Registered Auditor
1 More London Place
London, SE1 2AF
09 March 2009
The UK firm Ernst S Young LLP is a limited liability

partnership registered in England and Wales with
registered number 0C3Q00Q1 and is a member firm of
Ernst 8 Young Global Limited. A list of members' names
" • w - 10 is available far inspection at 1 More London Place,
London SE1 2AF, the firm's principal place of business
INVESTOR IN PEOPLE and registered office.
Income statement
For the year ended 30 September 2008
2008 2007
£
Notes
Interest and similar income 3 399,163,421 294,585,947

Interest and similar expenses 4 (286,960,207) (215,752,014)
Net interest income 112,203,214 78,833,933
Fee and commission income 2,954,899 1,136,163

Fee and commission expense (6,348) (10,788)
Trading losses (99,907,934) (403,782)
Other (expense) I income (96,959,383) 721,593
Net Operating Income 15,243,831 79,555,526
Administrative expenses (7,963,413) (9,448,647)

Depreciation of properly, plant and equipment (12,700) (17,894)
Total operating expenses (7,976,113) (9,466,541)
Operating profit before impairment losses 7,267,718 70,088,985

Impairment losses on loans and advances 13 (124,073,168) (46,515,199)
(Loss) / profit before taxation (116,805,450) 23,573,786
Taxation 8 33,948,738 (6,750,394)
(Loss) / profit for the year (82,856,712) 16,823,392
The income statement includes net exchange losses of £1,438,694 (2007: gains £101,435) arising from the conversion of
non-Sterling profits or losses at an average rate for the year as opposed to the year end rate.
The notes on pages 1 5 - 6 2 form part of these financial statements.
11
Balance sheet 30 September 30 September
2008 2007
As at 30 September 2008
Notes £ £
Assets
Derivative financial instruments 10 31,212,066 17,026,608
Loans and advances to banks 11 14,332,222 228,001,352
Loans and advances to customers 12 4,792,977,845 3,987,717,652
Property, plant and equipment 15 16,962 28,552
Current taxation 20,523,689 2,046,622
Deferred taxation 16 1,892,351 800,057
Other assets 17 16,529,170 14,917,022
Prepayments and accrued income 114,263 226,231
Total assets 4,877,598,568 4,250,764,096
Liabilities
Loans and borrowings 18 2,826,401,806 2,240,952,721
Derivative financial instruments 10 87,221,306 57,296,657
Other liabilities 19 9,941 55,546
Accruals and deferred income 53,279 337,541
Deferred taxation 16 4,515,860 5,532,326
Subordinated liabilities and other capital instruments 20 1,725,158,275 1,629,494,492
Total liabilities 4,643,360,467 3,933,669,283
Share capital 21
Retained profits
Shareholders' funds 234,238,101 317,094,813
Total equity and liabilities 4,877,598,568 4,250,764,096
The notes on pages 15-62 form part of these financial statements.
Director Director
Date: 05 March 2009
12
A N G L O IRISH A S S E T F I N A N C E PLC
S t a t e m e n t of c h a n g e s in equity
Share Retained
Capital Profits Total
£ £ £
Balance at 1 October 2006 220,000,000 80,271,421 300,271,421
Profit for the year 16,823,392 16,823,392
Balance at 30 September 2007 220,000,000 97,094,813 317,094,813
Loss for the year (82,856,712) (82,856,712)
Balance at 30 September 2008 220,000,000 14,238,101 234,238,101
The notes on pages 15-62 form part of these financial statements.
13
Cash flow statement
2008 2007
Notes £ £
Cash flows from operating activities

Profit before tax (116,805,450) 23,573.786
Financing costs of subordinated liabilities and other capital instruments 123,795,370 89,275,409
Other non-cash items 23 84,213,187 44,574,772
91,203,107 157,423,967
Changes in operating assets and liabilities
Net increase in loans and advances to customers (890,112,163) (1,496,653,090)
Net decrease in loans and advances to banks 575,962,791 673,887,528
Net increase in derivative financial instruments 10,192,713 36,375,874
Net increase in other assets (1,612,148) (10,480,200)
Net decrease in other liabilities (45,605) (142,323)
Exchange movements 111,979,077
Net cash flows from operating activities before taxation (102,432,228) (639,588,244)
Tax recovered/(paid) 13,375,180 (9,758,734)
Net cash flows from operating activities (89,057,048) (649,346,978)
Cash flows from investing activities

Purchases of property, plant and equipment (1,110) -
Disposals of property, plant and equipment - 9,337

Net cash flows from investing activities (1,110) 9,337
Cash flows from financing activities

Proceeds of equity share issues - 120,000,000
Proceeds from issues of subordinated liabilities and other capital instruments - 347,375,000
Coupons paid on subordinated liabilities and other capital instruments (140,163,327) (92,839,989)
Net cash flows from financing activities (140,163,327) 374,535,011
Net decrease in cash and cash equivalents (229,221,485) (274,802,630)

Opening cash and cash equivalents 23 228,001,352 482,194,643
Effects of exchange rate changes on cash and cash equivalents 6,066,061 20,609,339
Closing cash and cash equivalents 23 4,845,928 228,001,352
14
Notes to the financial statements
Accounting policies
1.1 Authorisation of financial statements and compliance with IFRS

The financial statements of the Company for the year ended 30 September 2008 were authorised for issue by the board of
directors and the balance sheet was signed on the board's behalf by Gordon Parker and Thomas Walsh on
on 05 March 2009. The Company is a public limited Company incorporated and domiciled in England and Wales.
The financial statements have been presented in accordance with International Accounting Standards and International
Financial Reporting Standards (collectively 'IFRS') as adopted by the European Union and applied in accordance
with the Companies Act 1985, and as applicable at 30 September 2008.
1.2 Basis of preparation

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain
assets and liabilities to the extent required or permitted under accounting standards as set out in the relevant accounting
policies. They are presented in Sterling.
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions
that affect the reported amounts of certain assets, liabilities, revenues and expenses, and disclosures of contingent
assets and liabilities. Since management's judgement involves making estimates concerning the likelihood of future
events, the actual results could differ from those estimates. Some estimation techniques involve significant amounts of
management judgement, often in areas which are inherently uncertain. The estimation techniques which are considered
to be most complex are in the areas of impairment of financial assets and the fair value of financial assets and
liabilities. Further detail is provided in Note 1.19 of these Accounting Policies.
The financial statements are prepared on a going concern basis, as Anglo Irish Bank Corporation Limited, the ultimate
parent undertaking, has agreed to provide financial support to the Company as would be required to allow the Company
to meet its future obligations as they fall due for at least 16 months from the date of signing the balance sheet and for the
foreseeable future.
1.3 Adoption of new accounting standards

From 1 October 2007 the Company adopted the following standards:
- IFRS 7 - Financial Instruments: Disclosures;

- Amendment to IAS 1 - Capital Disclosures;
- Reclassification of Financial Assets - Amendments to IAS 39 Financial Instruments: Recognition and Measurement
and IFRS 7 Financial Instruments: Disclosures
Recent amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments:
Disclosures permit the reclassification of certain financial instruments from held for trading and available-for-sale
financial assets. The Company has not made any such reclassifications.
1.4 Interest income and expense recognition

Interest income and expense are recognised in the income statement for all interest-bearing financial instruments
using the effective interest rate method.
The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts the expected future cash payments or receipts through the expected life of the financial instrument or, when
appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability.
15
Notes to the financial statements continued
1.4 Interest income and expense recognition continued

The calculation includes all fees, transaction costs and other premiums and discounts that are an integral part of the
effective interest rate on the transaction.
Once an impairment loss has been recognised on an individual asset, interest income is recognised using the rate of
interest at which the estimated future cash flows were discounted in measuring impairment.
1.5 Fee and commission income

Fees and commissions which are not an integral part of the effective interest rate are generally recognised on an accruals
basis over the period that the service has been provided.
Loan commitment fees for loans that are likely to be drawn down are deferred (together with related direct costs) and
recognised as an adjustment to the effective interest rate on the loan once drawn.
Commitment fees in relation to facilities where drawdown is not probable are recognised over the term of the commitment.
1.6 Financial assets

Financial assets are classified into the following categories: financial assets at fair value through profit or loss; loans and
receivables; and available-for-sale financial assets. Management determines the classification of its investments at initial
recognition.
Financial assets at fair value through profit or loss

This category has two sub-categories; financial assets held for trading, and those designated at fair value through
profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in
the short term or if so designated by management. These assets are carried at fair value.
Derivatives are classified as held for trading unless they are designated as hedges. Interest on financial assets
at fair value through profit and loss held on own account is included in net interest income. Other gains and
losses arising from changes in fair value are included directly in the income statement within trading losses/profits.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Company provides money to a counterparty with no intention of trading the receivable.
Loans and receivables are initially recognised at fair value, including direct and incremental costs, and are subsequently
carried on an amortised cost basis. The best evidence of the fair value at initial recognition is the transaction price (i.e. the
fair value of the consideration given or received).
Available-for-sale financial assets

Available-for-sale financial assets are those intended to be held for an indefinite period of time, which may be sold in
response to needs for liquidity or changes in interest rates, exchange rates, asset prices or other factors.
Available-for-sale financial assets are initially recognised at fair value, plus transaction costs, and are subsequently
carried at fair value with gains and losses recognised as a separate component of shareholders' equity.
In the current year and previous year, with the exception of derivatives, all financial assets are classified as loans and
receivables.
16
1.7 Financial liabilities

Financial liabilities are initially recognised at fair value, being their issue proceeds (fair value of consideration received)
net of transaction costs incurred. Financial liabilities are subsequently measured at either amortised cost or fair value
through profit or loss. All liabilities, other than those designated at fair value through profit or loss, are subsequently
carried at amortised cost. Any difference between proceeds net of transaction costs and the redemption value is
recognised in the income statement using the effective interest rate method.
A liability may be designated at fair value through profit or loss when:
a) it eliminates or significantly reduces a measurement or recognition inconsistency, 'an accounting mismatch', that
would otherwise arise from measuring assets and liabilities or recognising the gains and losses on them on
a different basis; or
b) a group of financial liabilities is managed and its performance is evaluated on a fair value
basis, in accordance with a documented risk management or investment strategy; or
c) it contains one or more embedded derivatives, the significantly modify the cashflows arising from the instrument
and would otherwise need to be accounted for separately.
The classification of an instrument as a financial liability or an equity instrument is dependent on the substance of the
contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset
to another entity are classified as financial liabilities. Interest on these instruments are recognised in the income
statement as an expense. Other gains and losses arising from changes in fair value are included directly in the
income statement within trading losses/profits.
Preference shares and other subordinated capital instruments are classified as financial liabilities if coupon payments
are not discretionary. Distributions on these instruments are recognised in the income statement as interest expense
using the effective interest rate method.
17
1.8 Impairment of financial assets

Provision is made for impairment of financial assets to reflect the losses inherent in those assets at the balance
sheet date.
The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a
portfolio of financial assets is impaired. A financial asset or portfolio of financial assets is impaired and impairment
losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more loss events
that occurred after the initial recognition of the asset ('a loss event') and that loss event (or events) has had an
impact such that the estimated present value of future cash flows is less than the current carrying value of the
financial asset, or portfolio of financial assets, and can be reliably measured.
Objective evidence that a financial asset, or a portfolio of financial assets, is impaired includes observable data that
comes to the attention of the Company about the following loss events:
i. significant financial difficulty of the issuer or obligor;

ii. a breach of contract, such as a default or delinquency in interest or principal payments;
iii. the granting to the borrower of a concession, for economic or legal reasons relating to the borrower's financial
difficulty that the Company would not otherwise consider;
iv. it becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
v. the disappearance of an active market for that financial asset because of financial difficulties; or
vi. observable data indicating that there is a measurable decrease in the estimated future cash flows from a
portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet
be identified with the individual financial assets in the portfolio, including:
- adverse changes in the payment status of borrowers in the portfolio, or
- national or local economic conditions that correlate with defaults on the assets in the portfolio.
The Company first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If the
Company determines that no objective evidence of impairment exists for an individually assessed financial asset
whether significant or not, it includes that asset in a group of financial assets with similar credit risk characteristics
and includes these performing assets under the collective 'incurred but not reported' ('IBNR') assessments.
An IBNR impairment provision represents an interim step pending the identification of impairment losses on an
individual asset in a group of financial assets. As soon as information is available that specifically identifies losses
on individually impaired assets in a group, those assets are removed from the group, Assets that are individually
assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included under
the collective assessment of impairment.
18
1.8 Impairment of financial assets continued

For loans and receivables, the amount of impairment loss is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate.
If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. The amount of the loss is recognised using an allowance account and the
amount of the loss is included in the income statement.
The calculation of the present value of the estimated future cash flows of a col lateral ised financial asset reflects the
cash flows that may result from foreclosure, less costs for obtaining and selling the collateral, whether or not foreclosure
is probable.
When a borrower fails to make a contractually due payment of interest or principal but the Company believes that
impairment is not appropriate on the basis of the level of the security / collateral available and / or the stage of collections
of amounts owed to the Company, a loan is classified as past due but not impaired. In this instance the entire exposure
is reported as past due but not impaired, rather than just the amount in arrears.
Renegotiated loans are those loans and receivables outstanding at the reporting date whose terms have been
renegotiated during the financial year, resulting in an upgrade from impaired to performing status. This is based on
subsequent good performance and/or an improvement in the profile of the borrower.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by
adjusting the allowance account. The amount of the reversal is recognised in the income statement, to the extent that
the carrying value of the asset does not exceed its amortised cost at the reversal date.
When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans are written
off after all the necessary procedures have been completed and the amount of the loss has been determined.
Subsequent recoveries of amounts previously written off decrease the amount of the allowance for loan impairment in
the income statement.
19
1.9 Derivative financial instruments and hedge accounting

Derivatives
Derivative instruments, including swaps, futures, forward foreign exchange contracts, forward rate agreements and options,
are used for hedging and trading purposes.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Fair values are obtained from quoted market prices in active markets including
recent market transactions, and valuation techniques including discounted cash flow models and options pricing models, as
appropriate. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
Derivatives are classified as held for trading unless they are designated as hedges.
The best evidence of the fair value of a derivative at initial recognition is the transaction price (i.e. the fair value of the
consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets.
Hedge accounting
The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated as a
hedging instrument and, the nature of the item being hedged. When transactions meet the criteria specified in IAS 39 the
Company applies fair value hedge accounting.
The Company documents, at the inception of the transaction, the relationship between hedging instruments and hedged
items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company
also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are
used in hedging transactions are highly effective in offsetting changes in fair values of hedged items.
Fair value hedge accounting

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income
statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the
hedged risk.
If the hedge no longer meets the criteria for hedge accounting, the fair value hedge adjustment cumulatively
made to the carrying amount of the hedged item is, for items carried at amortised cost, amortised to the income statement
over the period to maturity of the previously designated hedge relationship using the effective rate method.
Derivatives that do not qualify for hedge accounting

Certain derivative instruments entered into as economic hedges may not qualify for hedge accounting. These derivatives
are classified as held for trading. Changes in the fair value of any derivative that does not qualify for hedge accounting
are recognised immediately in the income statement.
20
1.10 Collateral and Netting

Collateral
The Company receives collateral in the form of cash in respect of credit instruments, such as derivatives, in order
to reduce credit risk. Collateral received in the form of cash is recognised on balance sheet with a corresponding liability.
Any interest payable or receivable arising is recorded as interest expense or interest income respectively.
Netting
Financial assets and liabilities are offset and the net amount reported in the balance sheet if, and only if, there is
a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
1.11 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and provisions for impairment, if any.
Additions and subsequent expenditure are capitalised only to the extent that they enhance the future economic benefits
expected to be derived from the asset. Property, plant and equipment are depreciated on a straight-line basis over their
estimated useful economic lives as follows:
Fixtures and fittings 12.5% to 25% per annum

Motor vehicles 20% per annum
The useful lives and residual values of property, plant and equipment are reviewed and adjusted, if appropriate, at each
balance sheet date.
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. The recoverable
amount of an asset is the higher of its fair value less costs to sell and its value in use. Gains and losses on disposal of
property, plant and equipment are included in the income statement in the period of derecognition.
1.12 Foreign currency translation

Functional and presentational currency
The financial statements are presented in Sterling, which is the Company's functional and presentational currency.
Transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional
currency rate of exchange ruling at the balance sheet date. All differences are recognised in the income
statement. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
retranslation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items
measured at fair value in the foreign currency are translated using the exchange rates at the date when the fair value
was determined.
21
1.13 Provisions
Provisions are recognised for present legal or constructive obligations arising as consequences of past events
where it is probable that a transfer of economic benefits will be necessary to settle the obligation, and it can be
reliably estimated.
When the effect is material, provisions are determined by discounting expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the
liability.
Payments are deducted from the present value of the provision and interest at a relevant discount rate is charged
annually to interest expense. Changes in the present value of the liability as a result of movements in interest rates are
included in other financial income, The present value of provisions are included in other liabilities.
Legal claims and other contingencies

Provisions are made for legal claims where the Company has a present legal or constructive obligation as a result of past
events and it is more likely than not that an outflow of resources will be required to settle the obligation and the amount
can be reasonably estimated.
Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events giving
rise to present obligations where the transfer of economic benefit is uncertain or cannot be reliably measured. Contingent
liabilities are not recognised but are disclosed in the notes to the financial statements unless they are remote.
1.14 Taxation (current and deferred)

Current tax is the expected tax payable (shown as a liability) or the expected tax receivable (shown as an asset) on the
taxable income for the year adjusted for changes to previous years and is calculated based on the applicable tax
law in the United Kingdom. Deferred tax is provided using the balance sheet liability method on temporary differences
arising between the tax bases of assets and liabilities for taxation purposes and their carrying amounts in the
financial statements. Current ^nd deferred taxes are determined using tax rates based on legislation enacted or
substantively enacted at the balance sheet date and expected to apply when the related tax asset is realised or the
related tax liability is settled.
Deferred tax assets are recognised where it is probable that future taxable profits will be available against which
temporary differences will be utilised.
Current and deferred taxes are recognised in the income statement in the period in which the profits or losses arise
except to the extent that they relate to items recognised directly in equity, in which case taxes are also recognised in
equity.
Deferred and current tax assets and liabilities are only offset where there is both the legal right and intention to settle on
a net basis, or to realise the asset and settle the liability simultaneously.
22
1.15 Leases
Company as lessor
Leasing and instalment credit agreements with customers are classified as finance leases if the lease agreements
transfer substantially all the risks and rewards of ownership, with or without ultimate legal title. Assets that are held
subject to finance lease, or instalment credit agreements are recorded as receivables based on the present value
of the lease payments, discounted at the rate of interest implicit in the lease, less any provisions for bad and
doubtful rentals. The difference between the total payments receivable under the lease and the present value of
the receivable is recognised as unearned finance income, which is allocated to accounting periods under the
pre-tax net investment method to reflect a constant periodic rate of return. Impairment reviews on finance leases are
carried out as per impairment reviews of loans and receivables (Note 1.8 and 1.19 of Accounting policies).
Assets leased to customers are classified as operating leases if the tease agreements do not transfer substantially all
the risks and rewards of ownership. The leased assets are included within property, plant and equipment on the
Company's balance sheet and depreciation is provided on the depreciable amount of these assets on a systematic basis
over their estimated useful lives. Rental income, including the effect of lease incentives, is recognised on a straight
line basis over the non cancellable term of the lease.
Company as lessee
Operating lease rentals payable and related lease incentives receivable are recognised as an expense in the income
statement on a straight-line basis over the lease term unless another systematic basis is more appropriate.
1.16 Segmental reporting

Business segments are distinguishable components of the Company that provide products or services that are subject to
risks and rewards that are different to those of other business segments. Geographical segments provide products or
services within a particular economic environment that is subject to risks and rewards that are different to
those of components operating in other economic environments.
1.17 Cash and cash equivalents

For the purposes of the cash flow statement, cash comprises cash on hand and demand deposits. Cash equivalents
comprise highly liquid investments that are convertible into cash with an insignificant risk of changes in value and
with original maturities of less than three months.
1.18 Financial guarantees

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because the guaranteed party fails to meet a contractual obligation or to make payment when due in
accordance with the original or modified terms of a debt instrument.
Financial guarantees are given to banks, financial institutions and other bodies on behalf of customers to secure loans,
and other lending facilities and to other parties in connection with the performance of customers under obligations
related to contracts, advance payments made by other parties, tenders, retentions and the payment of import duties and
taxes.
Financial guarantees are initially recognised in the financial statements at fair value on the date that the guarantee
was given. Subsequent to initial recognition, the Company's liabilities under such guarantees are measured at the higher
of the initial measurement, less amortisation calculated to recognise in the income statement the fee income earned over
the period, and the best estimate of the expenditure required to settle any financial obligation arising as a result of
the guarantees at the balance sheet date.
23
1.19 Significant accounting estimates and judgements

The reported results of the Company are sensitive to the accounting policies, assumptions and estimates that underlie the
preparation of its financial statements. IFRS require the directors, in preparing the company's financial statements, to
select suitable accounting policies, apply them consistently and make judgements and estimates that are reasonable and
prudent.
The judgements and estimates involved in the Company's accounting policies that are considered by the directors to be
the most important to the portrayal of the Company's financial condition and that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The use of estimates, assumptions or models that differ from those adopted by the Company could affect its reported
results.
Loan impainvent
The estimation of potential loan losses is inherently uncertain and depends upon many factors. On an ongoing basis
potential issues are identified promptly as a result of individual loans being regularly monitored. At least every six months
the Company through the auspices of the Group Risk function of Anglo Irish Bank Corporation Limited, the ultimate parent
of the Company, reviews its loan portfolios to assess whether there is objective evidence of impairment. If there is
objective evidence that a loan is impaired, a provision is recognised equating to the amount by which the book value of
the loan exceeds the present value of its expected future cash flows. Provisions are calculated on an individual basis
with reference to expected future cash flows including those arising from the realisation of collateral. The
determination of these provisions often requires the exercise of considerable judgement by management involving matters
such as future economic conditions and the resulting trading performance of the customer and the value of collateral,
for which there may not be a readily accessible market. As a result these provisions can be subject to significant
variation as time progresses and the circumstances become clearer. The methodology and assumptions used for
estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between
loss estimates and actual loss experience.
An additional incurred but not reported ('IBNR') collective provision is required to cover losses inherent in the loan book
where there is objective evidence to suggest that it contains impaired loans but the individual impaired loans cannot
yet be identified. This provision takes account of observable data indicating that there is a measurable decrease in the
estimated future cash flows from a group of loans with similar credit risk characteristics, although the decrease cannot
yet be identified within the individual loans in the group.
This provision is calculated by applying incurred loss factors to groups of loans sharing common risk characteristics.
Loss factors are determined by historical loan loss experience as adjusted for current observable market data.
Adjustments reflect the impact of current conditions that did not affect the years on which the historical loss experience
is based and remove the effects of conditions in the historical period that do not exist currently.
The future credit quality of loan portfolios against which an IBNR collective provision is applied is subject to
uncertainties that could cause actual credit losses to differ materially from reported loan impairment provisions. These
uncertainties include factors such as local and international economic conditions, borrower specific factors, industry
trends, interest rates, unemployment levels and other external factors.
24
1.19 Accounting estimates and judgements continued
Fair value of financial instruments

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable and willing
parties in an arm's length transaction. Fair values are determined by reference to observable market prices where these
are available and are reliable. Where representative market prices are not available or are unreliable, fair values are
determined by using valuation techniques which refer to observable market data. These include prices obtained from
independent third party pricing sen/ice providers, comparisons with similar financial instruments for which market
observable prices exist, discounted cash flow analyses and other valuation techniques commonly used by market
participants.
Fair value of financial instruments (continued)

Where non-observable market data is used in valuations, any resulting difference between transaction price and
valuation is deferred. The deferred day one profit or loss is either amortised over the life of the transaction, deferred
until the instrument's fair value can be determined using market observable inputs, or realised through settlement,
depending on the nature of the instrument and availability of market observable inputs. The accuracy of fair value
calculations could be affected by unexpected market movements when compared to actual outcomes.
Expected life of lending

IAS 39 requires interest and arrangement fees which form an integral part of the return earned from lending to be
measured using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated
future cash receipts and payments through the expected life of the loan or, when appropriate, a shorter period to the
net carrying amount of the loan.
Management uses judgement to estimate the expected life of each loan and hence the expected cash flows relating
to it. The accuracy of the effective interest rate would therefore be affected by unexpected market movements resulting
in altered customer behaviour and differences in the models used when compared to actual outcomes.
Taxation
The taxation charge accounts for amounts due to fiscal authorities in the United Kingdom, and includes estimates
based on a judgement of future profits and the application of law and practice in certain cases in order to determine
the quantification of any liabilities arising. In arriving at such estimates, management assesses the relative merits
and risks of tax treatments assumed, taking into account statutory, judicial and regulatory guidance and, where
appropriate, external advice. Where the final tax outcome is different from the amounts that are currently recorded,
such differences will impact upon the current and deferred tax amounts in the period in which such determination
is made.
25
1.20 Prospective accounting changes

The Company has not applied the following new standards, amendments to standards and interpretations (IFRICs)
that have been adopted by the International Accounting Standards Board which would be applicable to the Company
with an effective date after the date of these financial statements :
IFRS 8 - Operating Segments;

Amendment to IAS 1 - Presentation of Financial Statements;
Amendment to IAS 23 - Borrowing Costs;
Amendment to IAS 32 - Financial Instruments: Presentation;
Amendment to IAS 39 - Financial Instruments: Recognition and Measurement - Eligible Hedged Items;
IFR1C Interpretation 18 - Transfer of Assets from Customers
These will be adopted in future years and are not expected to have a material impact on the Company's results or
26
Segmental reporting
Geographical segments 2008

Mainland Rest of
UK Europe World Total
£ £ £ £
Revenue from external customers 327,025,356 74,110,399 982,565 402,118,320
(Loss)/profit before tax (a) (b) (c) (122,456,342) 5,710,991 (60,099) (116,805,450)
External assets 3,626,141,887 1,227,296,309 7,631,202 4,861,069,398
External liabilities (c) 868,750,711 948,207,950 - 1,816,958,661
Additional information:
Impairment losses on loans and 117,774,660 6,298,508 - 124,073,168
advances (including IBNR)
2007
Mainland Rest of
UK Europe World Total
£ £ £ £
Revenue from external customers 245,223,470 48,857,079 1,641,561 295,722,110
Profit / (loss) before tax (a) (b) 27,194,615 (4,307,272) 686,443 23,573,786
External assets 3,326,767,100 889,580,979 19,498,995 4,235,847,074
External liabilities 831,985,622 860,730,940 - 1,692,716,562
Additional information:
Impairment losses on loans and 43,780,201 2,734,998 - 46,515,199
advances (including IBNR)
Revenue includes interest and similar income, fee and commission income, dealing profits and other operating income.
The geographical segments are based primarily on the currency of the related assets.
(a) All subordinated liabilities and other capital instruments are included under the relevant currency of issue. Thus Euro
based subordinated liabilities and capital instruments are analysed against mainland Europe, whereas Sterling based
subordinated liabilities and capital instruments are analysed against the United Kingdom.
(b) Income generated from shareholders funds is allocated against the United Kingdom.
(c) All items related to the Japanese Yen financing arrangement have been allocated against the United Kingdom.(See
Note 5).
The Company's primary segment is its sole business segment, namely the provision of commercial finance to businesses
and individuals.
27
3 Interest and similar income 2008 2007

£ £
Interest on loans and advances to banks 9,380,658 16.097.052

Interest on loans and advances to customers 388,324,607 273,996,895
Finance leasing and hire purchase income 1,458,156 4,460,001
Other interest income - 31.999
399,163,421 294,585.947
4 Interest and similar expenses 2008 2007

£ £
Interest on subordinated liabilities and other capital instruments 123,795,370 89,275,409

Interest on deposits from banks 7,563 -
Interest on intercompany balances 163,157,274 126,476,605

286,960,207 215,752,014
5 Trading losses 2008 2007

£ £
Hedge ineffectiveness 893,371 (403,782)

Foreign exchange contracts (24,399,377) -
Foreign exchange revaluation on foreign currency liabilities (76,401.928) -
(99,907,934) (403,782)
Foreign exchange contracts and revaluation on foreign currency liabilities represent the impact of a Japanese
Yen financing arrangement, entered into in May 2008 to enable the parent company and therefore the ultimate
parent company to avail of low cost financing on an after tax basis at Yen interest rates. The losses to the
Company on foreign exchange on this financing transaction are reduced by other foreign exchange gains in the
period in various UK group companies of the ultimate parent, Anglo Irish Bank Corporation Limited, ("UK group")
of £76,401,928 and the net remaining loss to the UK group of £24,399,377 is more than eliminated by reduced tax
charges, generating an overall after tax profit for UK group of £4,909,509 from the Japanese Yen financing
arrangement.
6 Administrative expenses 2008 2007

£ £
Staff costs:
Wages and salaries 4,953,318 5,343,841
Pension costs 578,873 449,664
Social welfare costs 583,297 591.182
Other staff costs 23.413 21,944
6,138,901 6.406.631
Other administrative costs 1,824.512 3,042,016
7,963,413 9.448.647
28
6 Administrative Expenses continued
Key management personnel that are directors of the Company are remunerated by the ultimate parent company, Anglo
Irish Bank Corporation Limited. These directors are full time employees of Anglo Irish Bank Corporation Limited and
receive no additional remuneration for their services to the Company. The staff costs reflected above are allocated to the
Company based on the Company's share of Anglo Irish Bank Corporation Limited's total loan base in the United
Kingdom. The Company does not directly employ any staff.
7 Auditor's remuneration (including VAT) 2008 2007

£ £
Audit and assurance services
Statutory audit 69,325 45,825
8 Taxation 2008 2007

£_ £_
Corporation tax
-current year (32,916,543) 7,250,492
- prior years 1,064,296 44,760
(31,852,247) 7,295,252
Deferred tax
-current year (1,149,755) (514,249)
- prior years (946.736) (30,609)
(33,948,738) 6,750,394
Effective tax rate 29% 29%
The deferred tax credit arising from the origination and reversal of temporary differences was as follows:
Leased assets (1,149,755) (514,249)
The reconciliation of total tax on profits on ordinary activities at the standard Corporation tax rate to the Company's
actual total tax charge is analysed as follows:
(Loss) / profit before taxation (116,805,450) 23,573,786
(Loss) / profit on ordinary activities before taxation at 29% (2007: 30%) (33,873,581) 7,072,136
Effects of:
Non deductible expenses (946) 2,661
Effect of reduction in tax rate 39,228 (338,198)
Losses carried back (241,378)
Other 10,379 (356)
Prior year adjustments - Current Tax 1,064,296 44,760
Prior year adjustments - Deferred Tax (946,736) (30,609)
Total taxation (33,948,738) 6,750,394
29
9 IAS 19 pension disclosures
The total pension costs allocated to the Company for the year were £578,873 (2007: £449,664), which relate to the
Company's share of defined contribution pension costs for notionally allocated employees as described in Note 6.
10 Derivative financial instruments
Derivative financial instruments derive their value from the price of underlying variables such as interest rates, foreign
exchange rates, credit spreads or equity and other indices. Derivatives enable users to efficiently reduce or alter
market risks. In the normal course of business, the Company is party to various types of financial instruments used to
reduce its own exposure to fluctuations in interest rates.
With the exception of designated hedging derivatives, as defined by IAS 39, derivatives are treated as held for trading.
The held for trading classification includes economic hedges which do not meet the strict qualifying criteria for
hedge accounting.
The notional amount of a derivative contract does not necessarily represent the Company's real exposure to credit
risk, which is limited to the current replacement cost of contracts with a positive fair value to the Company should
the counterparty default. To reduce credit risk the Company uses a variety of credit enhancement techniques
such as master netting agreements and collateral support agreements, where cash security is provided
against the exposure. Derivatives are carried at fair value and shown in the balance sheet as separate
totals of assets and liabilities. Fair values are obtained from quoted market prices in active markets and using
valuation techniques including discounted cash flows. Derivative assets and liabilities on different transactions
are only netted if a legal right of offset exists and the cash flows are intended to be settled on a net basis.
Details of the objectives, policies and strategies arising from the Company's use of financial instruments, including
derivative financial instruments, are presented in Note 24 on risk management and control.
The following table overleaf presents the notional and fair value amounts of derivative financial instruments, analysed
by product and purpose.
30
Derivative financial instruments continued
2008
Contract
notional Fair values
amount Assets Liabilities
£ £ £
Derivatives held for trading
Cross currency swaps 400,000,000 - 24,399,377
Derivatives held for hedging: designated fair value hedges

Interest rate swaps 1,748,360,000 31,212,066 62,821,929
Total derivative financial instruments 2,148,360,000 31,212,066 87,221,306
2007
Contract
notional Fair values
amount Assets Liabilities
£ £ £
Derivatives held for trading
Cross currency swaps
Derivatives held for hedging: designated fair value hedges

Interest rate swaps 1,636,160,000 17.026,608 57,296,657
Total derivative financial instruments 1,636,160,000 17,026,608 57,296,657
The above cross currency swaps have been entered into as part of a Japanese Yen financing arrangement (see Note 5).
The above interest rate swaps have been entered into in order to convert the interest rate payable on the various
Subordinated Liabilities and other Capital Instruments to 3 month LIBOR / EURIBOR as applicable. This enables the
matching of interest earned on assets with these liabilites and thus eliminates interest rate risk. Further details are given
in Note 20.
Hedging activities:
The Company uses derivatives for hedging purposes to mitigate the interest rate risk exposure arising from its
issuance of its subordinated liabilities. For accounting purposes the Company uses derivatives which qualify as fair value
hedges.
Fair value hedges:

The Company uses interest rate swaps to hedge the interest rate risk resulting from potential changes in the fair value
of certain liabilities. Hedged liabilities include subordinated liabilities issued.
For the year ended 30 September 2008 the Company recognised a net gain of £15,030,320 (2007: loss of £40,932,880)
in dealing profits in respect of fair value movements on hedging instruments designated as fair value hedges.
The corresponding net loss attributable to the hedged risk on the hedged items, also recognised in trading
losses was £14,136,948 (2007: gain £40,529,099).
31
11 Loans and advances to banks 2008 2007

£ £
Placements with banks 14,332,222 228,001,352
The external ratings profile of loans and advances to banks is as follows:

2008 2007
£ £
AAA/AA 4,845,826 217,369,859

A
BBB+ / BBB / BBB- 9,486,396 1 0,631,493
Total 14,332,222 228,001,352
12 Loans and advances to customers 2008 2007

£ £
Loans and advances to customers 4,914,691,441 3,997,315,394

Amounts receivable under finance leases 10,427,362 12,941,070
Amounts receivable under hire purchase contracts 12,909,608 37,659,784
4,938,028,411 4,047,916,248
Provisions for impairment (Note 13) (145,050,566) (60,198,596)

4,792,977,845 3,987,717,652
Loans pledged as collateral

Loans and advances to customers include loans of £41,914,722 (2007: £nil) which have been transferred to
Anglo Irish Covered Bonds LLP, a limited liability partnership in which the Company is a partner. The transferred
loans secure bonds issued by the UK Branch of Anglo Irish Bank Corporation Limited under its €5bn covered bond
programme. The loans remain on the Company's balance sheet as the Company retains substantially all of the risks
and rewards relating to them.
Risk concentrations 2008 %of 2007 %of

£ total loans £ total loans
United Kingdom 3,543,945,537 74% 3,073,592,891 77%

Mainland Europe 1,199,489,312 25% 793,822,800 20%
Loans secured on real estate 4,743,434,849 99% 3,867,415,691 97%"
Other secured 49,542,996 1% 120,301,961 3%
Total loans and advances to customers 4,792,977,845 100% 3,987,717,652 100%
The analysis shows risk concentrations based on the geographic location of the secured real estate.
32
12 Loans and advances to customers continued
Asset quality
The Company monitors lending asset quality on an ongoing basis using the rating categories
outlined below. These ratings provide a common and consistent framework for aggregating and comparing exposures
across all lending portfolios. The categories are as follows:
High quality
High quality ratings apply to exposures of strong financial standing that have an excellent repayment experience.
These exposures are considered very low risk.
Good quality
Good quality ratings apply to exposures that are performing as expected and are of sound financial standing.
These exposures are considered low to moderate risk.
Satisfactory quality
This rating applies to exposures that continue to perform as expected satisfactorily, but are subject to closer monitoring.
Lower quality but not past due nor impaired

This rating applies to exposures that require increased management attention to prevent any deterioration in asset
quality. No evidence of specific impairment exists.
Past due but not impaired
These are loans and receivables where the contractual interest or principal payments are past due but where there
is no objective evidence of impairment due to the level of collateral and/or personal recourse available to the
Company.
Impaired loans
Loans are classified as impaired and impairment losses are incurred if, and only if, there is objective evidence of
impairment as a result of one or more loss events that occurred after the initial recognition of the loan. The loan is
impaired if that loss event (or events) has an impact such that the estimated present value of future cashflow is
less than the current carrying value and can be reliably measured.
33
12 Loans and advances to customers continued
Credit grading of lending assets

2008
Commercial Business Residential Other Total

Banking
£ £
High quality 94,764,048 94,764,048

Good quality 1,818,428,604 30,778,273 1,160.997,357 325,521,086 3,335,725,320
Satisfactory quality 416,704,484 125,065,818 25,132,000 566,902,302
Lower quality but not
past due nor impaired 290,365,426 179,011,908 19,698,964 489,076,298
Total neither impaired
nor past due 2,620,262,562 30,778,273 1,465,075,083 370,352,050 4,486,467,968
Past due but not
impaired 143,857,827 103,375,682 2,653,599 249,887,108
Impaired loans 28,252,373 -_ 168,827,825 4,593,137 201,673,335
Total loans 2,792,372,762 30,778,273 1,737,278,590 377,598,786 4,938,028,411
2007

Banking
£ £ £ £
High quality 57,687,577 57,687,577

Good quality 2,127,463,437 43,795,462 1,188,129,986 385,274,008 3.744,662,893
Satisfactory quality 4,607,338 20,982,328 25,589,666
Lower quality but not
past due nor impaired 11,289,532 19.120.280 30,409,812
Total neither impaired

nor past due 2,201,047,884 43,795,462 1,228,232,594 385,274,008 3,858,349,948
Past due but not
impaired 42,557,977 20,327.392 11,451,823 74,337,192
Impaired loans 17,472,431 70,276,624 27,480,053 115,229,108
Total loans 2,261,078,292 43,795,462 1,318,836,610 424,205,884 4,047,916,248
13 Provisions for impairment 2008 2007

£ £
At beginning of year 60,198,596 15,596,082

Charge against profits • specific 57,573,168 41,630,259
Charge against profits - collective 66,500,000 4,884,940
124,073,168 46,515,199
Unwind of discount (4,795,676) (1,872,543)
Write-offs (34,946,158) (82,872)
Recoveries of previous write-offs 41,447 19,811
Exchange rate movements 479,189 22,919
At end of year 145.050,566 60,198,596
Specific 67,875,278 50,002,496

Collective 77,175,288 10,196,100
Total provision 145,050.566 60,198,596
Impaired loans 201,673,335 115,229,108
The unwind of discount represents interest income earned on the performing element of impaired loans and advances.
35
13 Provisions for impairment continued
2008
Banking
£ £ £ £ £
At beginning of year 7,661,569 113,547 23,924,854 28,498,626 60,198,596
Charge against profits - specific 12,767,083 - 43,379,850 1,426,235 57,573,168
- collective 38,426,909 - 26,801,347 1,271,744 66,500,000
Write-offs (1,690,986) - (9,403,669) (23,851,503) (34,946,158)
Recoveries of previous write-offs 32,159 - 9,288 - 41,447
Unwind of discount (797,127) - (3,992,392) (6,157) (4,795,676)
Exchange movements 277,290 - 192,767 9,132 479,189
At end of year 56,676,897 113,547 80,912,045 7,348,077 145,050,566
Specific 12,155,803 50,680,846 5,038,628 67,875,278

Collective 44,521,094 113,547 30,231,199 2,309,449 77,175,288
Total provision 56,676,897 113,547 80,912,045 7,348,077 145,050,566
2007
Banking
£ £ £ £ £
At beginning of year 3,910,343 58,891 8,616,347 3,010,501 15,596,082
Charge against profits - specific 951,283 - 14,853,507 25,825,469 41,630,259
- collective 2,786,868 54,400 1,550,884 492,788 4,884,940
Write-offs - - (82,872) - (82,872)

Recoveries of previous write-offs - - 19,811 - 19,811
Unwind of discount - - (1,040,099) (832,444) (1,872,543)
Exchange movements 13,075 256 7,276 2,312 22,919
At end of year 7,661,569 113,547 23,924,854 28,498,626 60,198,596
Specific 1,844,674 20,687,769 27,470,053 50,002,496

Collective 5,816,895 113,547 3,237,085 1,028,573 10,196,100
Total Provision 7,661,569 113,547 23,924,854 28,498,626 60,198,596
36
14 Leasing
Loans and advances to customers include finance lease receivables (including hire purchase agreements), analysed by
remaining maturity as follows:
2008 2007
£
Gross investment in finance leases:
Three months or less 5,614,968 10,304,783
One year or less but over three months 7,696,977 16,039,896
Five years or less but over one year 10,625,508 26,454,266
23,937,453 52,798,945
Unearned future income on finance leases (600,483) (2,198,091)
Net investment in finance leases 23,336,970 50,600,854
Present value of minimum lease payments receivable:

Three months or less 5,572,579 10,663,061
One year or less but over three months 7,358,913 15,404,215
Five years or less but over one year 10,405,478 24,533,578
Present value of minimum payments receivable 23,336,970 50,600,854
Provision for uncollectable minimum lease payments receivable* 1,004,665 495,915

* Included in provisions for impairment on loans and advances to customers (Note 13).
There are no unguaranteed residual values accruing to the benefit of the Company (2007: £Nil).
15 Property, plant & equipment Equipment

and motor
vehicles
£
Cost or valuation
At 1 October 2006 182,317
Additions
Disposals (100,146)
At 1 October 2007 82,171

Additions 1,110
Disposals (15,715)
At 30 September 2008 67,566
Accumulated depreciation
At 1 October 2006 122,999
Charge for the year 17,894
Disposals (87,274)
At 1 October 2007 53,619

Charge for the year 12,700
Disposals (15,715)
Net book value

37
15 Property, plant & equipment continued
As at 30 September 2008, the Company had annual commitments under non-cancellable operating leases as follows:
Property
Operating leases which expire: £
Within one year 85,622

One to five years 300,000
Over five years 56,250
441,872
16 Deferred taxation
2008 2007
£ £
At 1 October (4,732,269) (5,279,632)

Charge for the year 2,096,491 544,858
Exchange movements 12,269 2,505
At end of year (2,623,509) (4,732,269)
Analysis of credit for the year:

Impairment provisions (4,825) (151,914)
Leased assets 1,540,787 (270,157)
Arrangement fees 560,968 961,659
Derivatives (439) 5,270
2,096,491 544,858
Analysis of deferred taxation asset:

Leased assets 1,168,642
Impairment provisions 708,935 800,057
Other 14,774
1,892,351 800,057
Analysis of deferred taxation liability:

Leased assets 455,936
Arrangement fees 4,487,747 5,048,715
Derivatives 28,113 27,675
4,515,860 5,532,326
Represented on the balance sheet as follows:

Deferred tax assets 1,892,351 800,057
Deferred tax liabilities (4,515,860) (5,532,326)
(2,623,509) (4.732,269)
The corporation tax rate in the United Kingdom changed to 28% from 30% on 1 April 2008. The deferred tax
assets and liabilities have been provided based on a tax rate of 28%.
38
17 Other assets
2008 2007
£ £
Amounts owed by group undertakings 16,529,058 14,902,278

Sundry assets 112 14,744
16,529,170 14,917,022
18 Loans and borrowings

2008 2007
£ £
Amounts owed to parent undertaking 1,769,344,016 2,240,952,721

Amounts owed to group undertakings 1,057,057,790 -
2,826,401,806 2,240,952,721
Amounts owed to the parent undertaking are provided by Anglo Irish Bank Corporation Limited - London Branch (AIBC).
The facilities are provided by AIBC as required to enable the growth of the business with interest charges being on
commercial terms. AIBC has confirmed that it will continue to make funding available for the foreseeable future.
Amounts owed to group undertakings are provided by a fellow CDB group undertaking as part of the Japanese Yen
financing arrangement (See Note 5).
19 Other liabilities
2008 2007
£ £
Sundry liabilities 9,941 55,546
20 Subordinated liabilities and other capital instruments
2008 2007
£ £
Undated Loan Capital
£200m Step-up Callable Perpetual Capital Securities (a) 205,336,383 204,935,537
£250m Tier One Non-Innovative Capital Securities (b) 262,025,980 248,800,539
Other subordinated liabilities 79,030 69,680
Dated Loan Capital

€600,000,000 Fixed Rate/Variable Rate Subordinated Notes due 2034 (c) 432,860,985 392,300,348
€600,000,000 Fixed RateWariable Rate Subordinated Notes due 2036 (d) 454,554,633 422,581,198
£350,000,000 Fixed Rate/Floating Rate Subordinated Notes due 2037(e) 370,301,264 360,807,190
1,725,158,275 1,629,494,492
39
20 Subordinated liabilities and other capital instruments continued
(a) The £200m 8.5325% Step-up Callable Perpetual Capital Securities were issued by the Company on 28 June 2001.
The securities were issued at par value and have the benefit of a subordinated guarantee by Anglo Irish Bank
Corporation Limited.
The securities are perpetual securities and have no maturity date. However, they are redeemable in whole or in part at
the option of the issuer, subject to the prior approval of the Irish Financial Regulator and of the guarantor, at their
principal amount together with any outstanding payments on 28 June 2011 or on any coupon / payment date
thereafter.
The securities bear interest at a rate of 8.5325% per annum to 28 June 2011 and thereafter at a rate of 4.55% per
annum above the gross redemption yield on a specified United Kingdom government security, reset every five years.
The interest is payable semi-annually in arrears on 28 June and 28 December.
The interest rate on the securities has been swapped to 3 month LIBOR from the fixed rate on the securities for the
duration of the fixed rate of interest. This has been treated as a fair value hedge transaction.
(b) On 23 July 2002, the Company issued £160m 7.625% Tier One Non-Innovative Capital Securities ('TONICS')
at an issue price of 99.362%. A further tranche of £90m TONICS was issued on 21 March 2003 at an issue price of
106.378% plus accrued interest. These issues also have the benefit of a subordinated guarantee by Anglo Irish
Bank Corporation Limited.
The TONICS are perpetual and have no maturity date. However, they are redeemable in whole but not in part at the
option of the issuer, subject to the prior approval of the Irish Financial Regulator and of the guarantor, at their
principal amount together with any outstanding payments on 23 July 2027 or on any coupon payment date thereafter.
Interest is payable annually in arrears on 23 July on the TONICS at a rate of 7.625% per annum until 23 July 2027.
Thereafter, the TONICS will bear interest at a rate of 2.4% per annum above six month LIBOR, payable semi-annually
in arrears on 23 January and 23 July.
The rights and claims of the holders of the securities and the TONICS are subordinated to the claims of the senior
creditors of the issuer or of the guarantor (as the case may be) in that no payment in respect of the securities or the
TONICS or the guarantees in respect of them shall be due and payable except to the extent that the issuer or the
guarantor (as applicable) is solvent and could make such a payment and still be solvent immediately thereafter and the
guarantor is in compliance with applicable regulatory capital adequacy requirements. Upon any winding up of the issuer
or the guarantor, the holders of the securities and the TONICS will rank pari passu with the holders of preferred
securities and preference shares issued by or guaranteed by the issuer or the guarantor and in priority to all other
shareholders of the issuer and of the guarantor.
The interest rate on the TONICS has been swapped to 3 month LIBOR from the fixed rate on the TONICS for the
duration of the fixed rate of interest. This has been treated as a fair value hedge transaction.
(c) On 30 September 2004, the Company issued €600,000,000 Fixed RateA/ariable Rate Subordinated Notes due 2034
('Subordinated Notes') at par.
The Subordinated Notes are due to mature on 30 September 2034. However, they are redeemable in whole, but not
in part, at the option of the Company on but not before 30 September 2009 or on any of the subsequent half
yearly interest payment dates.
40
20 Subordinated liabilities & other capital instruments continued
Interest is payable semi-annually in arrears on 30 March and 30 September. The interest rate on the Subordinated
Notes is fixed at 6.45% per annum until 30 September 2005 and thereafter resets every six months at a rate linked
to the Euro ten year constant maturity swap, subject to a cap of 9% per annum. There were no issue costs.
The interest rate on the Subordinated Notes has been swapped to 3 month LIBOR until 30 September 2014. This has
been treated as a fair value hedge transaction.
(d) On 30 September 2006, the Company issued €600,000,000 Fixed RateA/ariable Rate Subordinated Notes due 2036
The Subordinated Notes are due to mature on 29 September 2036. However, they are redeemable in whole, but not
in part, at the option of the Company on but not before 29 September 2016 or on any of the subsequent yearly
interest payment dates.
Interest is payable annually in arrears on 29 September up until 29 September 2016 and thereafter quarterly on
29 December, 29 March, 29 June and 29 September. The interest rate on the Subordinated Notes is fixed at
5.619% per annum until 29 September 2016 and thereafter resets every 3 months at a rate linked to the rate of
deposits ("EUR-EURIBOR-Reference Banks") for a period of 3 months plus a fixed amount of 2.6% per annum.
There were no issue costs.
The rights and claims of the holders of the Subordinated Notes are subordinated to the claims of the senior creditors
of the Company in that no payment in respect of the Subordinated Notes shall be due and payable except to the
extent that the Company is solvent and could make such a payment and still be solvent immediately thereafter.
The interest rate on the Subordinated Notes has been swapped to 3 month LIBOR until 30 September 2016. This has
e) On 30 May 2007, the Company issued £350,000,000 Fixed Rate/Floating Rate Subordinated Notes due 2037
The Subordinated Notes are due to mature on 1 June 2037. However, they are redeemable in whole, but not in
part, at the option of the Company on but not before 01 June 2017 or on any of the subsequent quarterly interest
payment dates.
Interest is payable semi-annually in arrears on 1 June and 1 December up until 1 June 2017 and thereafter
quarterly on 1 March, 1 June, 1 September and 1 December. The interest rate on the Subordinated Notes is
fixed at 7.349% per annum until 1 June 2017 and thereafter resets every 3 months at a rate linked to the rate
of deposits ("EUR-GBP-LIBOR-Reference Banks") for a period of 3 months plus a fixed amount of 1.79% per annum.
There were no issue costs.
The rights and claims of the holders of the Subordinated Notes are subordinated to the claims of the senior creditors
of the Company in that no payment in respect of the Subordinated Notes shall be due and payable except to the
extent that the Company is solvent and could make such a payment and still be solvent immediately thereafter.
The interest rate on the Subordinated Notes has been swapped to 3 month LIBOR until 30 May 2017. This has
41
21 Called up share capital 2008 2007

£
£
Ordinary share capital

Ordinary shares of £1 each
Authorised: 300,000,000 Ordinary shares of £1 each (2007 : 300,000,000) 300,000,000 300,000,000
Allotted, called up and fully paid 220,000,000 220,000,000
Post year end the authorised share capital was increased from 300,000,000 to 3,300,000,000 shares. The allotted,
called up and fully paid shares were increased from 220,000,000 to 1,220,000,000 shares. On 18 November 2008,
1,000,000,000 ordinary shares were issued at par and subscribed by CDB(UK) Limited, the parent company, thereby
increasing ordinary share capital by £1,000,000,000 to £1,220,000,000.
22 Memorandum items
2008 2007
£ £
Contingent liabilities
Guarantees and irrevocable letters of credit 44,657,242 42,255,490
Performance bonds, VAT guarantees and other transaction related 17,006,821 14,596,159
contingencies 61,664,063 56,851,649
Commitments
Credit lines and other commitments to lend 703,350,537 1,702,540,904
23 Cash flow statement

2008 2007
Other non-cash items £ £
Provisions for impairment 124,073,168 46,515,199

Unwind of discount (4,795,676) (1,872,543)
Loans and advances written off net of recoveries (34,904,711) (63,061)
Net (decrease) / increase in accruals and deferred income (284,262) 59,840
Net decrease / (increase) in prepayments and accrued income 111,968 (86,092)
Depreciation and amortisation 12,700 17,894
Other - 3,535
84,213,187 44,574,772
Cash and cash equivalents
Loans and advances to banks 4,845,928 228,001,352

(with a maturity of less than three months - Note 27)
The Company is required by its ultimate parent, Anglo Irish Bank Corporation Limited, to utilise all surplus cash to reduce
its Loans and Borrowings owed to parent undertaking (Note 18).
42
24 Risk management and control
The Company is subject to a variety of risks and uncertainties in the normal course of its business activities. As required
by the Disclosure Rules and Transparency Rules of the Financial Services Authority, a description of the principal risks
and uncertainties facing the Company is included in the Management Report. In addition to these principal risks and
uncertainties, which include general macro-economic conditions, specific risks also arise from the use of financial
instruments. These specific risks include credit risk, market risk, liquidity risk, operational risk and compliance risk..
In order to effectively minimise the impact of these risks, the directors place reliance on the group processes
of the various committees and control functions of the ultimate parent, Anglo Irish Bank Corporation Limited ("AIBC").
In particular, the AIBC Risk and Compliance Committee oversees risk management and compliance covering credit,
market, liquidity and operational risk. The directors of AIBC and the Company delegate their monitoring and control
responsibilities to the AIBC Group Credit Committee for credit matters and to the AIBC Group Asset and Liability
Committee ("AIBC ALCO") for market risk and liquidity matters. The members of these committees include senior
management and non-executive directors from throughout the AIBC Group and are supported by a dedicated AIBC
Group Risk management function ("AIBC Group risk management").
AIBC Group risk management, finance and internal audit are central control functions of the AIBC Group, independent
of line management, whose roles include monitoring the Company's activities to ensure compliance with financial and
operating controls, The general scheme of risk management, financial control and operational control is designed to
safeguard the Company's assets while allowing sufficient operational freedom for the business units to earn a
satisfactory return for shareholders.
Credit risk
Credit risk is the risk that the Company will suffer financial loss from a counterparty's failure to pay interest,
repay capital or meet a commitment that they have entered into where the collateral pledged as security is
insufficient to cover the payment due. The Company's credit risk arises primarily from its lending activities to customers
(banking credit risk), as well as its use of derivatives (treasury credit risk).
Banking credit risk:

The Company's policy on banking credit risk is set out in a detailed AIBC Group credit policy manual which has been
reviewed by the AIBC Risk and Compliance Committee and approved by the directors of AIBC and adopted by the
directors of the Company. Applications for credit are assessed within the following criteria:
- Credit standing of a counterparty including up to date net worth information;

- Loan to value ratios;
- Debt service cover;
- Value and quality of collateral;
- Exposure limits to an individual counterparty or group of connected counterparties;
- Sectoral risk concentration limits and
- Country risk concentration limits.
Every lending manager is responsible for managing risk in his or her business area, while the overall risk infrastructure
is monitored by AIBC Group's Banking credit risk function ("Banking credit risk") to ensure effective implementation of
controls, methodologies and procedures.
43
24 Risk management and control continued
AIBC Group operates a tiered system of discretions. Consistency of approach is ensured by the implementation of the
credit policy and the presence of key personnel at all Credit Committee meetings. The AIBC Group Credit Committee,
which is the most important forum for approving credit exposures, includes Executive directors and senior management of
AIBC. All credit committees must reach a consensus before authorising a credit exposure and each individual credit must
be signed by a valid quorum.
Credit risk is identified and assessed through a combination of top-down and bottom-up risk assessment processes.
Top-down processes focus on broad risk types and common risk drivers, rather than specific individual risk events, and
adopt a forward-looking view of perceived threats over the planning horizon. Bottom-up risk assessment is performed on a
loan-by-loan basis, focusing on risk events that have been identified through specific qualitative or quantitative
measurement tools. Banking credit risk undertake a full semi-annual review of AIBC Group's loan book, where all aspects
of a loan's performance are thoroughly reviewed.
The performance of individual facilities is closely monitored by Banking credit risk who maintain a list of lower quality
cases. These cases, while considered lower quality, are not impaired but require increased management attention to
prevent any deterioration of asset quality. Banking credit risk also maintain a list of satisfactory cases for exposures
that continue to represent satisfactory quality loans but are subject to closer monitoring.
Impaired loans are identified in line with the recognition of 'objective evidence' as defined in the Company's
provisioning policy.
Specific provisions are created where one or more loss events have been recognised and as a result a shortfall is expected
between the amount of the Company's exposure and the likely recoverable amount. The recoverable amount is calculated
by discounting the value of expected future cash flows by the exposure's original effective interest rate.
Incurred but not reported ('IBNR') provisions are created on a collective basis for loans and advances where there is no
objective evidence of individual specific impairment. This provision is calculated with reference to historical loss
experience supplemented by observable market evidence and management's experienced judgement regarding current
market conditions.
Lending teams, in consultation with AIBC Group risk management, devise and implement action plans in order to
minimise loss arising from impaired loans. This may involve working with the borrower to achieve a satisfactory outcome
for both the Borrower and the Company. However, in certain circumstances the loan may be repaid from the sale proceeds
of security held, and/or by availing of recourse to the guarantor. Where the proceeds from collateral are not sufficient to
repay the loan, AIBC Group risk management has the authority to write-off the outstanding exposure. AIBC Group risk
management will make this determination, in line with AIBC Group credit policies, when it has concluded that the
likelihood of further recovery is remote.
Renegotiated loans are those facilities that, during the financial year, have had their terms renegotiated resulting in an
upgrade from impaired to performing status. This upgrade can be based, among other things, on subsequent
good performance or an improvement in the credit profile of the borrower. Renegotiated loans and advances were
£775,000 as at 30 September 2008 (£Nil: 2007).
44
24 Risk management and control
The AIBC Group's credit policy is designed to ensure that AIBC Group limits significant credit risk concentrations.
Banking credit risk monitor risk concentrations and reports, at divisional and AIBC Group level, on a monthly basis. More
detailed reports are prepared quarterly at AIBC Group level. In addition other specific reports are prepared as required.
This reporting facilitates discussion at senior management and Board level on appropriate actions and ensures that the
Company's view on risk remains cogniscent of and sensitive to emerging trends and common themes.
Risk concentrations within the Company are not representative of overall AIBC Group risk concentrations, being the level
at which such concentrations are managed.
Risk concentrations
The Company's loans and advances to customers consist primarily of secured term lending to the business sector. An
analysis of risk concentrations by sector is as follows:
2008 2008 2007 2007

£ % £ %
Retail 1,027,044,364 20% 643,951,484 16%
Office 140,819,315 3% 113,221,474 3%
Mixed use 174,133,201 4% 125,863,421 3%
Industrial 57,178,402 1% 58,110,250 2%
Residential 143,874,865 3% 89,238,724 2%
Residential development 1,593,398,527 32% 1,229,597,887 30%
Business banking 29,747,458 1% 43,795,462 1%
Personal 3,769,350 0% 15,419,393 0%
Leisure 78,054,480 2% 69,240,900 2%
Commercial development 1,299,919,160 26% 1,246,391,276 31%
Other property investment 16,259,851 0% 4,299,486 0%
Other 373,829,437 8% 408,786,490 10%
Loans and Advances to Customers* 4,938,028,411 100% 4,047,916,248 100%
"Total loans and advances to customers are stated gross of provisions.
45
Maximum exposure to credit risk
2008 2007
£ £
On balance sheet
Derivative financial instruments 31,212,066 17,026,608
Loans and advances to banks 14,332,222 228,001,352
Loans and advances to customers 4,792,977,845 3,987,717,652
Off balance sheet

Contingent liabilities 61,664,063 56,851,649
Commitments to lend 703,350,537 1,702.540,904
Maximum exposure to credit risk 5,603,536,733 5,992,138,165
Where financial instruments are recorded at fair value, the amounts shown above represent the current credit risk
exposure but not the maximum risk exposure that could arise as a result of changes in fair value.
46
Aged analysis of financial assets past due but not impaired.
These are loans and receivables where contractual interest or principal payments are past due. Based on an
individual assessment of each past due loan, impairment is not appropriate on the basis that the level of collateral
available and/or the personal recourse available to AIBC Group is sufficient to ensure full payment.
2008
Banking
£ £
Past due 1 to 30 days 12,145,723 16,042,740 1,177,603 29,366,066

Past due 31 to 60 days 12,253,329 16,515,863 28,769,192
Past due 61 to 90 days 17,689,362 28,620,520 46,309,882
Past due 91 days and over 101,769,413 42,196,559 1,475,996 145,441,968
Total 143,857,827 103,375,682 2,653,599 249,887,108
2007
Banking
£ £ £ £
Past due 1 to 30 days 4,111,553 18,548,074 6,915,122 29,574,749

Past due 31 to 60 days 4,096,480 4,096,480
Past due 61 to 90 days 26,617,352 347,281 4,536,701 31,501,334
Past due 91 days and over 7,732,592 1,432,037 9,164,629
Total 42,557,977 20,327,392 11,451,823 74,337,192
47
Collateral
The acceptance of both financial and non-financial collateral is central to the risk mitigation and underwriting policies adopted
adopted by the Company and AIBC Group. Loans and advances to customers are collateralised principally by charges over
real estate assets, charges over business assets and liens on cash deposits, and are supplemented by personal guarantees.
In the case of clients with more than one transaction with the Company or another AIBC Group entity, the Company seeks to
cross-collateralise security to strengthen repayment cover. Where appropriate, collateral is independently valued at
at the time of borrowing and is subject to regular revaluation, in line with AIBC Group credit risk policies.
Collateral of £206m (2007: £77m) is held against impaired loans and advances to customers of £238m (2007: £119m).
At September 2008 the Company had repossessed collateral of £0.8m on balances of £0.5m (2007:£Nil collateral on
balances of £Nil). It is the Company's policy to dispose of repossessed assets in an orderly fashion. The proceeds are
used to reduce or repay the outstanding balance. The Company does not use repossessed assets for business purposes.
The Company has executed Collateral Support Agreements ('CSAs') with its principal derivatives counterparties. Under the
terms of a CSA, if the aggregate market value of a set of derivative contracts between two parties exceeds an agreed
threshold amount, the party which would be exposed to loss in the event of default receives a deposit of cash or eligible
securities equal to the excess aggregate value over the threshold.
Market risk
Market risk is the potential adverse change in income or financial position arising from movements in interest rates,
exchange rates or other market prices. Market risk arises from the structure of the balance sheet and the execution of
customer trading. The Company recognises that the effective management of market risk is essential to the maintenance
of stable earnings, the preservation of shareholder value and the achievement of the Company's corporate objectives.
The exposure to market risk is governed by policies prepared by AIBC Group risk management and approved by the AIBC
ALCO and the AIBC Risk and Compliance Committee. All risk limits are approved by AIBC ALCO and by the AIBC Risk
and Compliance Committee.
Banking book risk

Banking book positions are those acquired with the intention of holding them to maturity in the normal course of business.
Interest rate risk in the banking book arises from a combination of lending, funding and non-trading treasury activities.
AIBC Group Treasury manages the market risk associated with all of these activities on a consolidated basis for the whole of
AIBC Group.
Market risk in the banking book primarily arises from exposure to changes in interest rates. The Company's financial assets
and liabilities have interest rates that are reset at different times or under different bases. There is a potential impact on
earnings and value that could occur when liabilities cannot be repriced as quickly as assets in a falling interest rate
environment or when assets cannot be repriced as quickly as liabilities in an environment of rising rates.
The Company does not have any exposure to equity risk. Currency risk is managed through the matching, to the extent
possible of currency assets and liabilities. A currency balance sheet is provided in Note 28. The Company incurs
foreign exchange risk on the Japanese Yen financing arrangement which is set off against gains across various UK group
companies which are integral to the overall operation of this transaction which is beneficial to the results of the UK group
and the ultimate parent group.
48
Banking book interest rate risk is measured at by establishing the repricing characteristics of each asset, liability
derivative instrument. The risk is managed by the AIBC Group Treasury through basis point sensitivity and nominal
position limits at total AIBC Group level.
AIBC Group Risk management provides daily reporting of banking book risk positions against approved PVBP and
nominal position limits. It provides monthly reporting to ALCO on banking book activity with analysis of all significant risk
positions, including the results of stress testing.
The following table shows the sensitivity of the Company's banking book, including derivatives, to an assumed 100
basis point ('bp') movement in interest rates in terms of the impact on net interest income over a twelve month period:
Sensitivity of annual net interest income to 100 bp increase: GBP EUR JPY
£ £ £
At 30 September 2008 12,918,579 558,287 (10,633,631)
At 30 September 2007 3,164,571 314,227
This measure assumes all interest rates, currencies and maturities move at the same time and by the same amount. It
does not incorporate the impact of management actions that, in the event of an adverse rate movement, could reduce
the impact on net interest income. In practice, interest rate risk is actively managed and the impact of yield curve
movements on interest income will be different from that calculated by this measure. The sensitivity analysis as shown has
the same potential impact on the income statement and equity.
Use of financial instruments

The Company uses financial instruments in the normal course of its business. To fund asset growth the Company
raised funds via the capital markets by issuing subordinated liabilities and other capital instruments and has raised
additional funding to support business from Anglo Irish Bank Corporation Limited - London Branch as required. Interest
rates on financial instruments can be either fixed or variable, with varying contractual terms from short to long term.
Where appropriate the Company uses derivatives to manage interest rate and foreign exchange exposures arising from
the use of financial instruments and the risks arising within its interest bearing activities, either from lending or funding.
Derivatives
A derivative is a financial instrument which defines certain financial rights and obligations which are
contractually linked to interest rates, exchange rates or other market prices. Derivatives are an efficient and
cost effective means of managing market risk and limiting counterparty exposures. As such they are an indispensable
element of treasury management for the Company.
Further details are disclosed in note 10. The accounting policy on derivatives is set out on page 16.
It is recognised that certain forms of derivatives can introduce risks which are difficult to measure and control.
For this reason, it is Company policy to place boundaries on the nature and extent of its participation in
derivative markets and to apply the industry regulatory standards to all aspects of its derivative activities.
The Company's derivative activities are governed by policies approved by the AIBC ALCO. These policies relate to the
management of the various types of risk associated with derivatives, including market risk, liquidity risk and credit risk.
49
Liquidity risk
Liquidity risk is the risk that the Company does not have sufficient financial resources available at all times to meet
its contractual and contingent cash flow obligations or can only secure these resources at excessive cost. It is Company
policy to ensure that resources are at all times available to meet the Company's obligations arising from the drawdown
of customer facilities and asset expansion. This is achieved through a commitment from Anglo Irish Bank Corporation
Limited to continue to provide financial resources for the foreseeable future.
Liquidity risk is monitored centrally by the AIBC ALCO, whose responsibilities in relation to liquidity include, but
are not limited to:
- Setting liquidity risk strategy for the AIBC Group

- Approving and maintaining AIBC Group funding and liquidity policy
- Approving and maintaining the AIBC Group contingency funding plan
- Maintaining internal and external liquidity risk limits
- Liquidity stress testing and scenario analysis; and
- Providing the AIBC Group board and its Board Committees with regular liquidity updates.
Liquidity risk is measured using the cash flow mismatch approach where cash inflows and outflows are analysed
to produce a net cash flow position over set time periods. Cash outflows are assumed to be paid at the earliest
time period and cash inflow to be received at the latest potential time period. AIBC Group mitigate liquidity risk
through holding a stock of highly liquid assets which can be readily realised for cash and by focusing on the liquidity
profile of its assets and liabilities.
Operational liquidity risk is short term liquidity risk, ranging from intraday to one month. Execution of AIBC Group's
short term operational liquidity strategy and cash flow management on a daily basis is the responsibility of AIBC Group
Treasury, operating within strict formal limits set by AIBC ALCO. These limits ensure that a sufficient cash flow and
liquid asset buffer is maintained over and above net cashflow requirements. These cash flow requirements are required
using contractual cash flows and conservative assumptions for non contractual cash flow which may fall due. AIBC
Group treasury provide formal updates to AIBC ALCO liquidity sub committee and AIBC ALCO on a regular basis.
The following tables present the cash flows payable by the Company under financial liabilities by remaining contractual
maturities at the balance sheet date. The amounts disclosed in the tables are the contractual undiscounted cash flows
of all financial liabilities and therefore differ from the carrying amounts of liabilities in the consolidated balance sheet.
50
24 Risk management and control continued 30 September 2008
Over three Over one

months but year but
not more not more Over
than one than five five
Demand year years years Total
£ £ £ £ £
Financial Liabilities
Loans and borrowings 378,496,786 1,431,200,835 302,652,581 2,919,185,369
Derivative financial instruments (1) 62,961 4,476,833 24,312,146 58,667,377
Subordinated liabilities and other capital instruments - 91,491,743 439,344,064 2,180,403,186 2,732,632,243
Total Financial Liabilities 378,496,786 1,522,755,539 746,473,478 2,204,715,332 5,710,484,989
30 September 2007
Over three Over one

months but year but
not more not more Over
than one than five five
Demand year years years Total
£ £ £ £ £
Loans and borrowings 555,422,208 853,460,847 576,980,533 2,385,893,173
Derivative financial instruments (1) 914,547 1,947,230 8,753,735 15,722,940
Subordinated liabilities and other capital instruments 89,179,539 442,291,157 2,167,736,167 2,720,600,113
Total Financial Liabilities 555,422,208 943,554,933 1,021,218,920 2,176,489,902 5,122,216,226
(1) Derivative cash outflows are stated net of related inflows

Operational risk
Operational risk represents the risk that failed or inadequate processes, people or systems, or exposure to external
events could result in unexpected losses. The risk is associated with human error, systems failure, and inadequate
controls and procedures. The Company operates such measures of risk identification, assessment, monitoring
and management as are necessary to ensure that operational risk management is consistent with the approach, aims
and strategic goals of the Company and is designed to safeguard the Company's assets while allowing sufficient
operational freedom to conduct the Company's business.
The operational risk management process consists of the setting of strategic objectives, the identification of
risks and the implementation of action plans to mitigate the risks identified. Recognising that operational risk
cannot be entirely eliminated the Company implements risk mitigation controls including fraud prevention,
contingency planning and incident management. Where appropriate this strategy is further supported by risk transfer
mechanisms such as insurance.
The above management of operational risk is monitored by the AIBC Group Risk management function.
Compliance risk
The directors of this Company and the AIBC Risk and Compliance function are responsible for ensuring that the
Company is compliant with all relevant laws and good practice guidelines. This includes ensuring that all of AIBC
Group's personnel are aware of and take steps to comply with laid down policies and procedures. Non compliance can
give rise to reputational loss, legal or regulatory sanctions or material financial loss.
Compliance is charged with defining and identifying regulatory and compliance risks and developing a compliance
programme for the Company that includes the implementation and review of specific policies and procedures,
compliance monitoring and education of staff on regulatory and compliance matters.
The AIBC Risk and Compliance Committee has oversight of all compliance issues for the AIBC Group, including this
Company.
52
Capital management
The objectives of the Company's capital management policy are to efficiently manage the capital base to
optimise shareholders returns, while maintaining capital adequacy to ensure the Company's ability to continue as
a going concern.
The responsibility for capital adequacy rests with the directors. The directors manage the capital structure and make
adjustments to it in light of changes in economic conditions or changes in the risk profile of assets. In order to adjust
the capital structure the Company may return capital to shareholders, issue new shares or sell assets to reduce debt.
The Company monitors capital on the basis of a debt-to-capital ratio. Capital comprises all components of equity,
(ie share capital and retained earnings) as well as subordinated liabilities and other capital instruments. While the
subordinated liabilities and other capital instruments are classified as financial liabilities, they are managed as
capital due to their long term or perpetual nature.
The capital ratios at 30 September 2008 and 30 September 2007 were as follows:
2008 2007
£ £
Total equity 234,238,101 317,094,813

Subordinated liabilities 1,257,716,882 1,175,688,736
Other quasi-capital debt instruments 467,441,393 453,805,756
Capital 1,959,396,376 1,946,589,305
Total debt 2,826,401,806" 2,240,952,721
Debt to Capital ratio 1.15
Total capital has grown during the year due to an increase in subordinated liabilities and other capital instruments more
than offsetting the decrease in equity as a result of losses incurred. The increase in subordinated liabilities and other
capital instruments is primarily due to retranslation at year end rates of Euro denominated issuances. The capital ratio
has increased as a result of the increase in debt, which is reflective of balance sheet growth in the current year.
In order to further strengthen the capital position of the Company, on 18th November 2008, the ordinary share capital
of the Company was increased by £1,000,000,000. See note 30 for further details.
53
25 interest rate repricing 30 September 200
Over three Over six Over one

months but months but year but
Not more not more not more not more Over Non
than three than six than one than five five interest
months months year years years bearing Total
£ £ £ £ £ £ £
Assets
w
Loans and advances to banks 14,276,052 - 56,170 14,332,222
Loans and advances to customers 4,874,932,335 808,693 10,162,616 (92,925,799) 4,792,977,845
Other assets 39.076.435 39,076,435
Total assets 4,889,208,387 808,693 - 10,162,616 - (22,581,128) 4,877,598,568
Liabilities
Loans and borrowings (2,826,401,806) (2,826,401.806)
Derivative financial instruments - (87,221.306) (87,221,306)
Other liabilities (238,817,181) (238,817,181)
Subordinated liabilities and (79,030) (474,180.000) (200,000,000) (1,074.180,000) 23,280,755 (1,725.158,275)
other capital instruments
Total liabilities (2,826,480,836) (474,180,000) - (200.000.000) (1,074,180,000) (302,757,732) (4,877,598,568)
Hedging Derivatives (1,498,360,000) 224,180,000 - 200,000,000 1,074,180,000 - -
Interest rate repricing gap 564,367,551 (249,191,307) - 10,162.616 - (325,338,860) -
Cumulative interest rate

repricing gap 564,367,551 315,176,244 315.176.244 325,338,860 325,338,860
54
25 Interest rate repricing continued 30 September 2007
Over three Over six Over one

months but months but year but
Not more not more not more not more Over Non
than three than six than one than five five interest
months months year years years bearing Total
£ £ £ £ £ £ £
Assets
Loans and advances to banks 227,473,460 527,892 228,001,352
Loans and advances to customers 3,981,799,351 21,961,234 358,935 7,975,610 70,415 (24,447,893) 3,987,717,652
Other assets 18,018,484 18,018,484
Total assets 4,209,272,811 21,961,234 358,935 7,975,610 70,415 11,125,091 4,250,764,096
Liabilities
Loans and borrowings (2,240,952,721) (2,240,952,721)
Derivative financial instruments (57,296,657) (57,296,657)
Other liabilities - (323.020,226) (323,020,226)
Subordinated liabilities and (69,680) (418,080,000) (200,000,000) (1,018,080,000) 6,735,188 (1,629,494,492)
other capital instruments
Total liabilities (2,241,022,401) (418,080.000) - (200,000,000) (1,018,080,000) (373,581,695) (4,250,764,096)
Hedging Derivatives (1,386,160,000) 168,080,000 - 200,000.000 1,018,080,000 - -
Interest rate repricing gap 582,090,410 (228,038,766) 358,935 7,975,610 70.415 (362,456,604)
Cumulative interest rate

repricing gap 582,090,410 354,051,644 354,410,579 362,386,189 362,456,604
55
26 Average effective interest rates
2008 2007
Yield % Yield %
Assets
Loans and advances to banks 5.2 4.6
Loans and advances to customers 8.3 8.1
Liabilities
Subordinated liabilities and other capital instruments 6.5 6.4
The above figures do not take account of derivative interest rate hedging and therefore do not reflect economic margins
earned.
Interest income and expense on the interest-bearing financial instruments are recognised using the effective interest
rate method.
56
27 Maturity profile 30 September 200
Over three Over one

months but year but
Not more not more not more Over
than three than one than five five
Demand months year years years Total
£ £ £ £ £ £
Financial Assets
Derivative financial instruments 6,050,561 25,161,505 31,212,066
Loans and advances to banks (7,062,048) 11,907,976 9,486,294 14,332,222
Loans and advances to customers 385,558,834 801,390,007 1,385,241,163 2,040,295.740 180,492,101 4,792,977,845
Total Financial Assets 378,496,786 813,297,983 1,394,727,457 2,046.346,301 205.653.606 4,838,522,133
Loans and borrowings 378,496,786 801,390,007 1,385,241,163 261,273,850 2,826,401,806
Derivative financial instruments 24,399,377 62,821,929 87,221,306
Subordinated liabilities and other capital instruments 1,725,158,275 1,725,158,275
Total Financial Liabilities 378,496,786 825,789,384 1,385,241,163 261,273,850 1,787,980,204 4,638,781.387
The above table breaks down the Company's financial assets and liabilities by remaining contractual maturity. The maturity profile for those assets and liabilities defined as 'financial'
have been determined in accordance with groupings that are considered most appropriate for those particular assets and liabilities.
Undated subordinated liabilities have been included in amounts maturing over 5 years.
57
27 Maturity profile continued 30 September 2007
Over three Over one

months but year but
Not more not more not more Over
than three than one than five five
Demand months year years years Total
£ £ £ £ £ £
Financial Assets
Derivative financial instruments 4,254,557 12,772,051 17.026,608
Loans and advances to banks 7,529,859 220,471,493 228,001,352
Loans and advances to customers 547,892,349 433,290,031 819,765,006 1,918,714.913 268,055,353 3,987,717,652
Total Financial Assets 555,422,208 653,761,524 819,765,006 1,922,969,470 280,827,404 4,232,745,612
Loans and borrowings 555,422,208 396,302,429 815,987,768 473,240,316 2,240,952,721
Derivative financial instruments 69,082 57,227,575 57,296,657
Subordinated liabilities and other capital instruments 1,629,494,492 1,629,494,492
Total Financial Liabilities 555,422,208 396,302,429 815,987,768 473,309,398 1,686,722,067 3,927,743,870
The above table breaks down the Company's financial assets and liabilities by remaining contractual maturity. The maturity profile for those assets and liabilities defined as
financial have been determined in accordance with groupings that are considered most appropriate for those particular assets and liabilities.
Undated subordinated liabilities have been included in amounts maturing over 5 years.
58
28 Currency balance sheet GBP EUR USD JPY CHF Other Total
£ £ £ £ £ £ £
Assets
Loans and advances to banks 5,173,231 9,164,522 (154) (5,377) 14,332,222

3,567,282,507 1,120,739,021 7,631,356 2,772,508 94,552,453 4,792,977,845
Loans and advances to customers
16,962 16,962
Property, plant and equipment
20,450,507 73,182 20,523,689
Current taxation
1,892,351 1,892,351
Deferred taxation
1,064,180 15,464,990 16,529,170
Other assets
114,263 114,263
Prepayments and accrued income
3,627,206,067 1,145,441,715 7,631,202 2,772,508 94,547,076 4,877,598,568
Total assets
Liabilities
Loans and borrowings 1,447,204,875 192,558,746 26,997,369 1,063,363,065 2,633,701 93,644,050 2,826,401,806
Derivative financial instruments* 26,404,555 60,816,751 87,221,306
Other liabilities 9,941 9,941
Accruals and deferred income 53,066 213 53,279
Deferred taxation 4,619,521 (103,661) 4,515,860
Subordinated liabilities and other 837,663,628 887,494,647 1,725,158,275
capital instruments
Total liabilities 2,315,955,586 1,140,766,696 26,997,369 1,063.363,065 2,633,701 93,644,050 4,643,360,467
Share capital 220,000,000 - - - - - 220,000,000

Retained profits 35,538,150 4,675,019 (19,366,167) (7,650,734) 138,807 903,026 14,238,101
Shareholders' funds 255,538,150 4,675,019 (19.366,167) (7,650,734) 138,807 903,026 234,238,101
Total equity and liabilities 2,571,493,736 1,145,441,715 7,631,202 1,055,712.331 2,772,508 94,547,076 4,877,598.568
The JPY liabilities are hedged through positions in other UK group companies (see Note 5 for further details).
* Cross currency swaps are shown net in the swap base currency, as these will be settled on a net basis in line with the master netting agreement.
59
29 Fair value of financial assets and financial liabilities
The Company has estimated fair value wherever possible using market prices. In certain cases, however, including
advances to customers, there are no ready markets. Accordingly, the fair value has been calculated by discounting
expected future cash flows using market rates applicable at the year end. This method is based upon market
conditions at that date which may not necessarily be indicative of any subsequent fair value. As a result, readers
of these financial statements are advised to use caution when using this data to evaluate the Company's
financial position.
The concept of fair value assumes realisation of financial instruments by way of a sale. However, in many cases,
particularly in respect of lending to customers, the Company intends to realise assets through collection over time. As
such, the fair value calculated does not represent the value of the Company as a going concern at the year end.
The following table represents the carrying amount and the fair value of the Company's financial assets and liabilities
at the year end.
2008 2007
Carrying Fair Carrying Fair
amount value amount value
£ £ £ £
Non-trading financial instruments
Financial assets
Derivative financial instruments 31,212,066 31,212,066 17,026,608 17,026,608
Loans and advances to banks 14,332,222 14,332,222 228,001,352 228,001,352
Loans and advances to customers 4,792,977,845 4,784,470,338 3,987,717,652 4,014,066,208
Financial liabilities
Loans and borrowings 2,826,401,806 2,826,401,806 2,240,952,721 2,240,952,721
Derivative financial instruments 87,221,306 87,221,306 57,296,657 57,296,657
Subordinated liabilities and other 1,725,158,275 614,236,597 1,629,494,492 1,641,779,492
capital instruments
The fair value of loans and advances to customers are calculated by discounting expected future cash flows (excluding
margin for credit risk) using market rates applicable at the year end. The fair value applied to the
perpetual capital securities and subordinated liabilities are the quoted market values for these items at
the year end. The fair value of the other financial assets and liabilities are calculated by discounting expected
future cash flows using market rates applicable at the year end. The derivatives are marked to market at the year end.
60
30 Events after the Balance Sheet date
Nationalisation of ultimate parent company

On 15 January 2009, the Irish Government announced its intention to take Anglo Irish Bank Corporation pic ("the
Bank"), the ultimate parent undertaking of the Company, into State ownership. The Bank's shares were subsequently
suspended from trading on the Irish and London Stock Exchanges on 16 January 2009. The Anglo Irish Bank
Corporation Act 2009 which provided for the transfer of shares of the Bank to the Irish Minister for Finance, was
signed into Irish law on 21 January 2009. On the same date the Bank was re-registered as a private company and
its name was changed from Anglo Irish Bank Corporation pic to Anglo Irish Bank Corporation Limited.
Share capital
On 18 November 2008 the authorised share capital of the Company was increased to £3,300,000,000 by the
creation of 3,000,000,000 ordinary shares of £1 each. On the 18th November 2008,1,000,000,000 ordinary shares
were issued at par and subscribed by CDB (UK) Limited, the parent company.
Japanese Yen financing arrangement

Details are given in Note 5 of a Japanese Yen financing arrangement, entered into in May 2008, whereby the Company
exchanged a portion of its funding from a Sterling basis to a Yen basis. The arrangement was structured such that the
UK group companies of the ultimate parent, Anglo Irish Bank Corporation Limited, ("UK group") would benefit from
the differential between Sterling and Yen interest rates and the potential downside from a foreign exchange risk
perspective was mitigated by an offset on the UK group's taxation line. The arrangement had a positive impact on
the UK group's and ultimate parent's profit for the year ended 30 September 2008. Although the arrangement was
unwound in early January 2009, the strengthening of Yen against Sterling post year end has negatively impacted
trading income from foreign exchange contracts by £611m for the Company, which is reduced by related foreign
exchange gains in other UK group companies of £455m, resulting in a net negative impact on the UK group and
therefore the ultimate parent of £156m. The foreign exchange translation related to this arrangement may be offset by
a reduction in the UK group's taxation charge in 2009 and future years.
Impairment
The key economic indicators in the UK, the Company's principal operating market, and in the other mainland
European countries where underlying asset security resides, have continued to show a marked deterioration
since 30 September 2008. These economies are expected to contract further in 2009. Whilst the monetary and
fiscal actions taken by many governments and authorities are helpful, it will take some time before any
improvements as a result of monetary actions are reflected. As a result, the Company anticipates that loan
impairment charges will increase in 2009 and subsequent years.
31 Parent Company
The Company is a wholly owned subsidiary of CDB (UK) Limited, a company incorporated in England, which in turn
is a wholly owned subsidiary of Anglo Irish Bank Corporation Limited, incorporated in the Republic of Ireland. The
Company's financial statements have been consolidated only in the group financial statements of the ultimate
parent company and a copy of these financial statements are available from Stephen Court, 18/21 St. Stephen's
Green, Dublin 2, Ireland.
61
32 Related party transactions
The ultimate parent company, Anglo Irish Bank Corporation Limited, has provided loans to the Company. The
balance on these loans at 30 September 2008 totalled £1,769,344,016 (2007: £2,240,952,721). The Company
also received loans from its other AIBC Group entities. The balance on these loans at 30 September 2008
totalled £1,057,057,790 (2007: £Nil). The Company incurred an intercompany interest charge of £161,411,696
for the year (2007: £126,476,605).
62

Anglo Irish Asset Finance PLC 2008 Accounts

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Anglo Irish Asset Finance PLC 2008 Accounts

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Company No.

ANNUAL REPORT AND FINANCIAL STATEMENTS

ANGLO IRISH ASSET FINANCE PLC

YEAR ENDED 30 SEPTEMBER 2008

Statement of directors' responsibilities

Statement of changes in equity

Cash flow statement

Notes to the financial statements

Ernst & Young LLP

Anglo Irish Bank Corporation Limited

Barclays Bank ptc

REPORT OF THE DIRECTORS

2. PRINCIPAL RISKS AND UNCERTAINTIES

3. RESULTS FOR THE YEAR AND STATE OF AFFAIRS AS AT 30 SEPTEMBER 2008

6. DIRECTORS AND SECRETARY

REPORT OF THE DIRECTORS (Continued)

8. DISCLOSURE OF INFORMATION TO THE AUDITORS

10. INDEPENDENT AUDITOR

ON BEHALF OF THE BOARD.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE

- select suitable accounting policies and then apply them consistently;

Brian Linehan - Director

1. REVIEW OF BUSINESS PERFORMANCE

Key results for the year include:

Lending and asset quality 2008 2007

MANAGEMENT REPORT (Continued)

1. REVIEW OF BUSINESS PERFORMANCE (continued)

Lending and asset quality (continued)

Loans and borrowings 2008 2007

Subordinated liabilities and other capital instruments

2. PRINCIPAL RISKS AND UNCERTAINTIES

MANAGEMENT REPORT (Continued)

2. PRINCIPAL RISKS AND UNCERTAINTIES (continued)

Economic environment (continued)

Global financial markets and funding risk

3. IMPORTANT EVENTS SINCE THE YEAR END AND FUTURE DEVELOPMENTS

Nationalisation of ultimate parent company

MANAGEMENT REPORT (Continued)

Japanese Yen financing arrangement

5. FINANCIAL RISK MANAGEMENT

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF

Respective responsibilities of Directors and Auditors

Basis of audit opinion

The UK firm Ernst & Young LLP is a limited liability

Ernst & Young LLP

The UK firm Ernst S Young LLP is a limited liability

Interest and similar income 3 399,163,421 294,585,947

Fee and commission income 2,954,899 1,136,163

Administrative expenses (7,963,413) (9,448,647)

Operating profit before impairment losses 7,267,718 70,088,985

(Loss) / profit before taxation (116,805,450) 23,573,786

Taxation 8 33,948,738 (6,750,394)

(Loss) / profit for the year (82,856,712) 16,823,392

The notes on pages 1 5 - 6 2 form part of these financial statements.

The notes on pages 15-62 form part of these financial statements.

Date: 05 March 2009

Balance at 1 October 2006 220,000,000 80,271,421 300,271,421

Profit for the year 16,823,392 16,823,392

Balance at 30 September 2007 220,000,000 97,094,813 317,094,813

Loss for the year (82,856,712) (82,856,712)

Balance at 30 September 2008 220,000,000 14,238,101 234,238,101

The notes on pages 15-62 form part of these financial statements.

Cash flows from operating activities

Tax recovered/(paid) 13,375,180 (9,758,734)