David Prosser: A better light for banks

Outlook Accountants, we know, are masters of finding ways to present unpalatable news in a better light. Still, we take our hats off to the bean counters who have been advising the banks on their results this year. They've come up with a handy new yardstick: "operating profit before provisions".

So, for example, Allied Irish Banks made an operating profit before provisions of almost €3bn last year. And if you're one of those people who thinks it actually lost €2.3bn, you're being uncharitable – the bank would rather that you looked at the pre-provision figure (the provision in question being a €5bn charge for bad debts). Now there are some cynical folk who think of bad debt as one of those risks bankers should aim to avoid as part of their everyday business – rather than describing such losses as provisions, which gives the impression they're one-off events that can't be planned for. After all, if every business could claim to be profitable were it not for such irritating little provisions – no-one buying your products, say –we'd be in a bit of a mess.

Still, no doubt the accountants who came up with the phrase – which would more accurately be operating profits before losses – don't need to worry too much about provisions themselves.