AIB ramps up loan restructuring
AIB is ramping up its mortgage restructuring
Allied Irish Banks will ease the terms on 2,000 mortgages a month, according to the bank’s chief executive David Duffy.
In an interview with Bloomberg Mr Duffy said that the arrears will be tackled by splitting the mortgages, which will see part of the loan repayments put on hold until borrowers’ circumstances improve. Restructuring is being increased from 1,500 mortgages as regulators have criticised Irish banks for being too slow to reduce the number of loans in arrears.
Over 11 per cent of loans on private homes were at least three months in arrears in the third quarter of 2012.
Central Bank governor Patrick Honohan said last week it was “ramping up” its engagement with banks as they were “behind the curve” in dealing with mortgage arrears. Mr Duffy added that AIB will also start to write off irrecoverable debts.
However, he predicted that more repossessions will be inevitable and said the emphasis will be on seizing buy-to-let properties first. The bank is cleaning up its loan book as it hopes to attract new investors in 2014.