Ulster Bank extends mortgage breaks as it posts huge level of impairment costs                

Ulster Bank extends mortgage breaks as it posts huge level of impairment costs                
Pictured: CEO Bank of Ireland Francesca McDonagh & Ulster Bank CEO Jane Howardalong with members of AIB, Bank of Ireland, KBC, Permanent tsb and Ulster Bank,following a meeting Finance Minister Paschal Donohie at the start of the coronavirus pandemic. Picture: Gareth Chaney/Collins

Around 60% of the Ulster Bank customers availing of mortgage payment breaks during the Covid-19 crisis have requested an extension for the full period of six months, the bank has revealed.

It comes as Ulster Bank posted plunged to an operating loss of €276m after chalking up €278m in impairment charges in the first half the year. 

Ulster is the first of the Irish lenders to reveal the huge costs of the pandemic crisis as over 1 million people at one stage needed some sort of pandemic or wage-support welfare payment to make ends meet in recent months.

Including mortgages, personal loans, and corporate loans, the bank granted 16,800 payment breaks during the crisis.

Around 60% of the mortgage accounts who were availing of the first of three months of mortgage breaks had requested the breaks to continue for the full six months.

Pace of Recovery

Chief executive Jane Howard said, however, any arrears issue would not match the arrears crisis of 2011.

“Typically people who have resumed payments have gone back to work and the numbers who go back to work will dictate how many go back to paying,” Ms Howard said.

She said there will be a proportion of people whose job has disappeared or whose circumstances have changed substantially who will need some sort of assistance. 

Ms Howard reiterated that the bank was right in charging people on payment breaks interest charges as the fairest policy for all customers. 

She said that customers were asking for breathing space and the bank had been very clear with customers that it would cost less the quicker they pay off mortgages. 

She said that many of the people who have restarted payments are paying more and were not extending the length of their mortgages.

On house prices, Ulster Bank is sticking with its assumption that prices will fall by between 15% to 20% this year.

Nonetheless, conditions have improved since the first quarter although the bank believes that the pace of economic recovery will not be that much different than previously thought.

Asked about the future of Ulster Bank, she said that the mandate from the NatWest Group was still to grow the bank “organically”.

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