90% of BOI customers with restructured loans are meeting their commitments

Up to 90% of Bank of Ireland’s 20,000 mortgage customers whose loans are currently in restructuring mode, are meeting their commitments, the company revealed yesterday.

As part of the Bank’s better than expected first half financial results, an impairment charge of €444m relating to customer loans was noted; €336m, or 43%, lower than the first half of 2013. The bank attributed lower impairments to an improvement in asset quality.

BoI’s new lending volumes — relating, solely, to its Irish business, and excluding tracker mortgages — amounted to just over €2.5bn during the six months; making the bank the largest lender in the Irish market. The impairment for residential mortgages was €88m, down by €163m on this time last year. Improved household incomes and economic conditions have seen a significant reduction in the number of default arrears in owner-occupier mortgages.

Chief executive, Richie Boucher said the bank is making “sustained progress” on arrears levels and is meeting Central Bank targets in this regard.

Finance Minister, Michael Noonan welcomed BoI’s strong first half results, saying they offer further proof that the recovery in the Irish economy is taking hold. He added that — with the State being a 14% shareholder in the bank — the figures provided “good news” for the Irish taxpayer.

BoI has paid back €6bn in bail-out funds to the Government, to date, via disposals, interest payments and guarantee fees. The State’s remaining stake in the company is currently valued at around €1.2bn.

On future lending activity, Mr Boucher said that BoI has a €250m fund in place to finance new construction activity in the housing market, adding that there is no real limit to which that fund can extend and that the bank has a risk appetite for the construction sector. He also said that management has no plans to decrease the size of its 250 or so branch network, and will probably open more outlets.