Bank of Ireland outlines distressed mortgage moves

 

Bank of Ireland is offering mortgage restructuring options to between 400 and 500 customers per week, an Oireachtas committee was told today by one of the bank's public interest directors.

Joe Walsh, who was appointed to the board of the bailed out bank in 2009, said 700 staff across the group were now involved the management of mortgage arrears.

Mr Walsh said the bank, which controls about 20 per cent of the Irish mortgage market, had restructured 16,000 mortgages and over 86 per cent of customers whose mortgages had been restructured were meting their contracted payments.

"Bank of Ireland has mobilised very significantly around the management of mortgage arrears," he told the committee on finance, public expenditure and reform.

Mr Walsh appeared before the committee alongside fellow public interest director Tom Considine.

Mr Considine said that in September 2008, the State was guaranteeing €136 billion of liabilities at the bank and that this had fallen to €26 billion.

He said peak losses at the bank were not reached until 2010 when it recorded an underlying loss of €3.5 billion.

Both Mr Walsh and Mr Considine admitted they were given no terms of reference when appointed to the board in January 2009 by the then minster for finance Brian Lenihan.

They also said they had not reported to the Minister of Finance or his department or the Central Bank since their appointments.

Mr Walsh said he had been paid €80,000 in 2009, €79,000 in 2010 and 2011 and €89,000 in 2012. Mr Considine said he was paid €79,000 in 2009, €90,000 in 2010 and 2011 and €97,650 this year.

Public interest directors at Allied Irish Banks, Michael Somers and Dick Spring, also appeared before the committee today.

Sinn Féin finance spokesman Pearse Doherty asked Dr Somers if the bank intended to change its approach to debt forgiveness, claiming only €600,000 of distressed residential mortgage debt had been written off since the crash out of a total loan book of nearly €95 billion.

Dr Somers said bank officials need to be careful “that they’re not being hoodwinked” when it came to writing down debt.

He said a total of 2,000 staff at the bank were now employed in supporting customers experiencing difficulties with their loans. However, he said the bank had to deal individually with 37,000 distressed debt holders and “this would take some time”.

“We will not be throwing people out on the streets, some deal will have to be cut and if that involves the writing down of debt then so be it.”

Mr Spring, who was appointed to the board in 2009, said the level of trust between the Department of Finance and bank was at an all-time low when he joined.

While he had a number of informal contacts with the late minister for finance Brian Lenihan, detailing to him the scale of the problems faced by the bank, he there was no formal arrangements for reporting to the minister or the department.

Mr Spring said he was paid €26,000 in 2009, €47,000 in 2010 and €59,000 in 2011 as remunartioned from the bank for work which involved 60 days annually.

Dr Somers said he was paid €98,000 in fees in 2010 and €150,000 in 2011, with the differential reflecting his appointment as board deputy chairman and chairman of the board's risk committee in June 2010.

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