Bank of Ireland statement on the mortgage market

Bank of Ireland has made significant progress in raising capital, funding and in restructuring the business.  Against this strengthened background the Bank is in a position to support its customers by the provision of finance to mortgage borrowers and by supporting those mortgage customers in difficulties through a range of modification solutions that enable customers to retain their property whilst repaying their mortgage over time.

Supporting growth and movement in the market – Bank of Ireland provides 2 in every 5 new mortgages:

Bank of Ireland’s support for those who are seeking to buy a new home has firmly established the Bank as the preferred lender to Ireland’s mortgage borrowers.

Bank of Ireland continues to offer mortgages at competitive rates and terms and genuine access to finance for those who are seeking to buy a home and this has led to an increase in market share across all customer segments and in particular the important first time buyer segment – since early 2008 Bank of Ireland’s (incorporating Bank of Ireland and ICS Building Society) market share of new mortgage lending has increased from just under 16% to just over 40% – in the first quarter of 2012 Bank of Ireland provided vital financing to 2 in every 5 first time buyers allowing them purchase their first home.

In December 2011, to support customers purchasing their first home or moving home throughout 2012, Bank of Ireland launched a Mortgage Fund of €1.5bn.  To date in 2012, applications to the value of €1bn from potential first time buyers and movers have been processed.

Supporting customers in difficulty:

The Bank of Ireland residential mortgage portfolio in Ireland is €27.5 billion and the vast majority of our customers are continuing to meet their mortgage repayments.

As indicated in our Interim Management Statement on 24 April last, arrears in our Irish residential mortgage book have continued to increase reflecting the difficult economic environment in Ireland and elevated levels of unemployment. In that Statement, while noting that “we maintain our expectation that impairment charges will reduce from the elevated levels experienced in 2011” we also said that “we are engaging with residential mortgage customers who are in difficulty, and are seeking to provide sustainable mortgage restructures where appropriate and possible, and are continuing to enhance our product range and restructuring solutions.”

While the vast majority of the Bank’s customers are continuing to meet their mortgage repayments, the management of mortgage arrears is a key priority for Bank of Ireland.  We are continuously improving our processes and practices and are seeking every opportunity to deliver outcomes that are supportive of our customers while maximising recoveries for the Bank.  The Bank has committed significant resources to the management of mortgage arrears and has also employed 3rd party international expertise to supplement these resources.  Our key message to customers who find themselves in difficulty is to “come in and talk to us.”  The Bank’s focus and prioritisation is on bringing solutions to the significant majority of its mortgage customers with arrears where the deployment of such solutions enables the customer to retain their property whilst repaying their mortgage over time.

Bank of Ireland’s policy is to deal with arrears on a case by case basis.  The Bank has already extended significant support to customers who are experiencing current difficulties in repaying their mortgage and the experience demonstrates that for a considerable portion of customers in difficulties, forbearance solutions implemented to date have been and will remain effective.

The Bank has been a leader in bringing to its customers short term and longer term modification and restructure solutions and is keen and determined to continue to roll these out in the best interest of its customers and its other stakeholders.

Bank of Ireland looks forward to ongoing and professional engagement with Government and the Central Bank of Ireland in relation to this very important issue.