Bank of Ireland has €1.1bn of mortgages in Republic on Covid-19 payment breaks        

The bank maintained its share of around 25% of new mortgage lending in the Republic in the first nine months of the year. File picture: Julien Behal

About 6,400 mortgage accounts worth €1.1bn that the Bank of Ireland has in the Republic are on payment breaks but its overall amount of sourced loans appears not to have increased significantly at this stage of the Covid-19 crisis, up-to-date figures from the lender suggest.

The new figures released in a trading update are a snapshot of the number of payment breaks the bank has agreed with customers as of October 16.

They also show that in the Republic, Bank of Ireland has 1,900 payment breaks on consumer loans worth €28m, and 2,800 payment breaks to small and medium-sized firms that are worth €800m.

In the UK, the Bank of Ireland figures show it has an additional 4,300 mortgage payment breaks on loans worth €700m and  3,900 consumer accounts worth €44m, as well as a small number of SME payment breaks. 

The effect of the Covid-19 crisis on the bank is also reflected in its loan book. Customer loans shrunk to €76.3bn at the end of September, down by €3.2bn since the end of last year, with new lending falling by 25%.

However, there was no “material increase” in loans in recent months that under banking rules the lender has to categorise as non-performing, it said, as it reported €4.5bn in non-performing exposures or 5.8% of the total. 

And the bank maintained its share of around 25% of new mortgage lending in the Republic in the first nine months of the year.

The shares rose 2.25% in the latest session, meaning that the losses in the past year have been pegged back to 53%.

The bank also detailed it has accounted for €169m to fund its redundancy plans that will see the end of the equivalent of 1,450 full-time jobs through 2021.

Francesca McDonagh, chief executive, said trading picked up in the third quarter and that its level of capital reserves at 13.5% was “strong” but that the recent Covid-19 restrictions in Ireland and Britain as well as the outcome of the Brexit trade talks “present continued uncertainty”.

“Third quarter trading was positive relative to expectations,” the bank said. “Taking into account this positive trading, the potential impact of increased restrictions to control the pandemic and on-going uncertainties in relation to Brexit, our overall expectation for 2020 performance is unchanged,” it said.