EBS bidder: ‘We’ll cut mortgages’
American investor Wilbur Ross has joined a consortium that includes Dublin-based Cardinal Asset Management and the Washington buyout firm Carlyle Group to bid for building society EBS.
Mr Ross said that a successful bid by the consortium could result in existing EBS mortgage customers ultimately having to pay less than they currently owe on their home loans.
He said Irish lenders in general would have to cut the principal amount that people owed on mortgages.
However, one industry source was warning of the potential small print of such an outcome, saying that such a debt deal may not prove so cut and dried.
“These things are rarely as simple as they seem. It could be that such an outcome would still result in borrowers signing up to a higher rate for their remaining debt or entering a stringent agreement concerning it,” the source said.
Operations manager with Irish Mortgage Brokers Karl Deeter, said for existing customers it could mean rate increases.
“EBS have the highest percentage of loans on a standard variable of any bank in Ireland. To get profitable and reward the taxpayer, an upward re-pricing along with shedding jobs is the only way they can do it,” he said.
EBS is in talks with three private equity groups as well as Irish Life & Permanent about a takeover. Sources expect two preferred bidders to be chosen by the end of this month and a winner by the end of next.
