EBS open to idea of case-by-case ‘debt forgiveness’

THE EBS Building Society — which yesterday reported a seven-fold increase in annual after-tax losses, to €590 million — has said that it is open to the concept of “debt forgiveness” for defaulting mortgage customers, but only on an individual case-by-case basis.

The company — which is set to form one of the two pillars of a revised Irish banking network, via its pending merger with AIB — said that it won’t take a systemic approach to debt write-offs, but would consider a “customised” approach. Earlier this week, AIB suggested it would consider debt forgiveness for mortgage defaulters, but gave no further details.

Latest annual results for the EBS show that the building society-turned-bank made an after-tax loss of €589.6m in 2010; significantly up from a loss of €78.8m in 2009. Last year’s loss was driven by a €285m impairment charge and additional losses and impairments relating to the transfer of loan assets to the National Asset Management Agency (NAMA). Pre-tax losses — excluding NAMA transfers — amounted to €620.6m last year, up from €99.3m the previous year.