Government Guarantee to Safeguard Bank Deposits – IBF Statement

The Government decision to provide a guarantee arrangement to safeguard deposits in the banking system here, together with the decision last week to raise the threshold of the Deposit Guarantee Scheme, means that customers of all deposit-taking institutions operating in the State can rest assured that their deposits are secure and that they enjoy the highest levels of protection. IBF will be liaising with Government and the regulatory authorities regarding the detail of the measures announced and the mechanics of their implementation.

Note: Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644

Account Switching: New Developments

The latest figures compiled by the Irish Banking Federation (IBF) show that, by end-June 2008, some 53,000 personal bank accounts have been switched under the IBF Personal Account Switching Code since its introduction in February 2005. An average of 1,200 personal bank accounts continue to be switched each month.

A new dimension to the Switching Code was introduced on 1 September 2008. Customers who switch account providers have the option of closing the old account or keeping it open – prior to this, the old account was closed on successful completion of the switch. This new feature arises from consumer research (according to a survey of 1,000 adults by TNS mrbi in December 2006) showing that, while 50% of respondents would prefer to close the old account immediately, some 47% would prefer to leave it open for some period of time thereafter.

Pat Farrell, IBF Chief Executive, states: “The continued level of switching activity among consumers reflects both the intensity of competition in the marketplace and the perceived ease of switching under the Code. The additional option of leaving the old account open now makes the switching process even easier for consumers. Moreover, not alone is the Switching Code delivering in its own right, it is also acting as a catalyst for customer mobility right across the board and financial institutions are responding to this in their range of service and product offerings.”

Further information: Felix O’Regan, Head of PR and Public Affairs, tel. 6715311, 087 6481644

Background Notes

1. The Irish Banking Federation (IBF) and the country’s leading retail financial institutions developed the Personal Switching Code, which came into practice in February 2005. The Code is designed to make switching personal bank accounts as quick and convenient as possible.

2. The procedures on account switching cover current, deposit and savings accounts held by personal and business customers that are not subject to advance notice of withdrawal or encumbered by debt, guarantees or other obligations.

3. The IBF member institutions supporting the Code have made three key commitments to customers as follows:

to provide to customers a ‘switching pack’ that clearly and simply explains the process of switching accounts, who is responsible for what, how long it will take and exactly what the customer has to do;
to have the customer’s new account up and running within 10 working days from the bank’s approval of the customer’s application;
and to complete the process of switching everything over from the old to the new account – incl. standing orders and direct debits – within 7 working days of a signed (by customer) Transfer Account Form being sent by the new bank to the customer’s previous bank.
4. IBF worked closely with the Financial Regulator and other relevant parties in finalising the Code and a Financial Regulator representative attended, as an observer, at the meetings of the IBF Working Group that agreed its content.

5. The following retail banking institutions subscribe to the Code:
ACCBank AIB Bank Anglo Irish Bank
Bank of Ireland EBS Building Society First Active
Halifax ICS Building Society IIB Bank
Irish Nationwide Building Society National Irish Bank Northern Rock
permanent tsb Postbank Ulster Bank
6. All financial institutions, including non-IBF members, are welcome to subscribe these Codes.

More than 35,000 new mortgages issued in Q2 2008

First-time buyer share of market proves resilient

Switching activity remains strong

Market continues to adjust to more sustainable levels
The IBF/PwC Mortgage Market Profile published today shows that 35,154 new mortgages to the value of some €7.6 billion were issued during the second quarter of 2008, bringing the overall mortgage book to €145 billion.

The overall value of new lending is down 13.4% year on year – a trend which is consistent with other key market indicators. However, Q2 shows an increase in both lending volumes and value over Q1 2008. The following are among the key features of the second quarter data.

The volume of lending in Q2 represents an increase of 23.3% over the previous quarter, with a corresponding increase of 20.7% in value. In part explained by the seasonal lending patterns that give rise to relatively weaker Q1 data, this represents the first quarter-on-quarter increase since Q3 2006 for first-time buyers.

The resilience of the first-time buyer (FTB) segment of the market is further reflected in the 2.2 percentage points increase in share (by volume) of the overall market to account for 17.4% in Q2.

The level of switching activity (re-mortgage) continues to be strong, increasing in value by 14.8% quarter on quarter and by 11.9% year on year.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated:“A very healthy 35,154 new mortgages were issued in this second quarter, bringing the total number of mortgages issued in the year to date to over 63,000. The relative strength of the residential mortgage market continues to be reflected in the resilience of first-time buyers and the growth in switching activity. However, the market continues to adjust to more sustainable levels. Current trends can be attributed to a range of factors including consumer expectation of further house price reductions, the uncertain outlook on the economic and interest rate fronts, as well as the increased cost of funding for lenders.”

The IBF/PwC Mortgage Market Profile can be viewed by clicking here.

Note: Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644