Bank of Ireland – Sale of ROI non-performing exposures :
Following this transaction the Group’s NPE ratio is now below 5%.
Bank of Ireland has agreed to sell a portfolio of NPE predominantly secured on ROI buy-to-let investment (“BTL”) properties to Promontoria 2019 – SGA Designated Activity Company (an affiliate of Cerberus Capital Management).
The portfolio has a gross book value at 30 June 2019 of c.€0.25 billion. The transaction results in a marginal increase in the Group’s CET1 ratio while the Group’s net interest income will reduce by c.€3 million on an annualised basis. At completion the Group will receive a consideration of approximately €0.15 billion. The sale proceeds will be used for general corporate purposes.
This transaction has enabled the Bank to accelerate progress in reducing its NPE ratio. Following this transaction the Group’s NPE ratio is now below 5%. Our NPE reduction strategies will continue to be kept under review in response to the associated and evolving regulatory framework.
Bank of Ireland has the lowest percentage of NPEs of any Irish bank and is now the only Irish bank with NPEs below 5%. However, like all banks in Ireland the Bank is required to hold much more significant levels of capital against NPE mortgage loans than performing mortgage loans. This is capital that could otherwise be deployed in a range of ways, including lending into the Irish economy. Today’s transaction further assists the Bank in managing the regulatory capital requirements which apply to NPEs.
It is the intention that with the sale of the non-performing loans legal title and servicing of these loans transfers to Link ASI Limited (“Link”) and Link will become the point of contact for customers holding these loans.
There will be no change to the protections currently afforded to customers under the relevant Central Bank of Ireland statutory codes of conduct, including the Consumer Protection Code.
Customers do not need to take any action arising from this announcement. Both Bank of Ireland and Link will be writing directly to all customers. However, any customer seeking more information can contact our dedicated customer phone line on 01-6115302. This phone line is available 9:00am to 5:00pm, Monday to Friday, excluding Bank Holidays. Customers can also access information on our website www.bankofireland.com