Loss provisions planned if arrears targets fail

Banks will have to make loss provisions in their 2014 financial accounts if they fail to meet mortgage arrears targets set down by the Central Bank.

The Central Bank set targets in March for resolving the arrears crisis. It expected banks to contact customers in mortgage arrears over the course of this year and offer sustainable solutions. Then, over the course of next year, the banks would have been required to put in place these sustainable solutions.

Michael Noonan, the finance minister, said if the banks failed to meet these targets, they would be forced to make provisions against future losses. The Central Bank said these capital charges will start from the financial year beginning on Jan 1, 2014.