Number of mortgage customers in arrears declines for sixth month

September marked the sixth consecutive month in which Ulster Bank saw the amount of mortgage customers in arrears for 90 days, or more, decline.

Although the bank doesn’t divulge just how many of its home loan customers are in arrears, its third quarter results, published yesterday, also show a significant deterioration in mortgage impairment charges, down from £91m (€17.5m) in the second quarter of the year to £30m for the three months to the end of September.

This drop largely reflects the recent stabilisation in residential property prices in the Republic, and Ulster Bank’s management said yesterday that it expects its impairment costs to continue to “gently decline” as the macro-economic picture in Ireland continues to improve.

Overall, Ulster Bank continued to lower its losses in the latest quarter — generating operating losses of £132m for the third quarter of this year; down by 20% on the previous quarter and down by 45% on the £242m loss reported for Q3 last year.

Ulster Bank said the further improvement in its operating figures was primarily due to lower impairment losses. Total impairment losses for the period amounted to £204m, down from £263m in the second quarter of 2013 and 38% less than the £329m reported for the Q3 of 2012.

However, non-core impairments showed a significant increase — on a quarter-by-quarter basis — going from £189m at the end of June to £398m at the close of September — due, mainly, to a small number of significant charges on individual counter-party exposures.

“The numbers highlight the difficult operating environment in the Irish market, but we note the declining mortgage impairment charges,” Eamonn Hughes of Goodbody Stockbrokers said.

On its tackling of mortgage arrears, Ulster Bank said that it has invested in people, systems and tailored solutions to make it easier for customers to enter into arrangements to stay in their homes and remain “economically active”.

“Customers in financial difficulty are continuously encouraged to engage with the bank,” it added.


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