Lenihan: Level of bad debt less than reported figure

Minister for Finance Brian Lenihan has said the final amount of bad debts in Irish banks will be significantly less than reported on in recent days.

The level of bad debt that is unlikely to be re-paid to Irish banks, particularly for property loans, is estimated to be in the region of €90bn.

These debts will now be managed by the new National Assets Management Agency, and the plan is that this will free-up existing banks to administer clean or re-payable loans.

Speaking at the publication of details about the new agency, Lenihan said the total of the outstanding debts would be written-down or reduced.

“The €80-€90bn is the book value of the loans which are affected by the Government proposal - that's the position,” he said.

“Obviously, the degree of impairment is a future calculation which has to be made on a scientific basis in the context of the discussions the Government will now open with the relevant institutions.”

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