Bank: 35% of clients in arrears are not engaging
The bank’s CEO Jim Brown insisted the situation was “not fair” on the financial institution.
He said 35% of customers with distressed mortgages were either deliberately not paying, or avoiding engagement with the bank.
Addressing fears that the institution’s parent company, RBS, was considering pulling out of the Republic, he told the Oireachtas finance committee that the bank was committed to staying in business here.
Sinn Féin’s Pearse Doherty criticised Ulster Bank for including legal letters to customers in its tally of “solution offers”.
He said the move went against the spirit of Central Bank demands for 20% of customers in trouble to be offered sustainable resolution by the end of June.
Mr Doherty said the letters, that could eventually lead to repossession, amounted to 82% of Ulster Bank’s “resolution” offers.
Bank chiefs claimed that the letter helped prompt customers into engagement with the lender.
Mr Brown said there was no direct link between unemployment rates and mortgage arrears in the Republic — unlike the situation in the North.
“In most markets the unemployment rate is directly correlated to mortgage arrears, so the higher the unemployment rate is, the higher mortgage arrears tend to become.
“We’ve done some analyses across Northern Ireland, which has experienced similar distress to the Republic.
“Up until 2011, that correlation held. Since then in Northern Ireland, that has continued to be the case. Where unemployment has moved up, mortgage arrears have risen.
“But in the Republic, unemployment has come down from a peak, while in the same period mortgage arrears across the market has increased,” he said.
Mr Brown said the bank did not have a policy of mortgage debt write-downs, and said that major problems with technology at its branches last year had not hit business as deposits had risen by 12%.
Mr Brown said that he hoped Ulster Bank would return to profit next year.
