Ireland’s banks adopt principles to fight climate change and invest in a clean energy future

Principles promote environmental sustainability

Over 30 domestic and international financial institutions adopting the principles
Over 30 of Ireland’s leading domestic and international financial institutions are adopting a new set of principles which will help to promote environmental sustainability and mitigate climate change. The IBF Climate Change Principles for the Financial Sector were today launched jointly by the Minister for Energy, Communications and Natural Resources, Eamon Ryan TD, and by the Irish Banking Federation (IBF) President, Mike Ryan.

The principles reflect a commitment to support viable, clean and green energy projects in the future. They place Ireland in the vanguard of countries that promote the directing of investments towards a more sustainable and financially rewarding path.

Developed by an IBF working group, the Principles provide a ground-breaking, common framework within which each financial institution will seek to operate in support of climate change mitigation and environmental sustainability in accordance with its own commercial considerations. The Principles cover the following areas of activity:

Energy Financing – a new direction of investment in energy efficiency, clean energy technology and the carbon market;
Waste Management – investment in waste management infrastructure consistent with environmental sustainability;
Customer Services – helping our customers by offering products and services that encourage and support sustainability;
Operations Management – management of the institution’s own in-house policies and practices for a sustainable future.

Speaking at the launch, Minister Ryan said: “These Principles clearly demonstrate Ireland’s ability to take a leadership position in the financing of clean energy. Not only are they innovative and cutting-edge by international standards, but they will serve as a critical tool to help us change direction toward sustainable, productive and financially attractive investments. This new direction from Irish banks and their international colleagues will help our economy recover and help guarantee jobs in the future. I congratulate the IBF and its members for this proactive and important initiative and look forward to the Principles being widely applied.”

Expressing considerable satisfaction with the development of the Principles and that so many IBF-member institutions are adopting them, Mike Ryan, IBF President went on to state: “The success of these Principles will depend on how we, as financial institutions, apply them in our decision-making, but also on there being an appropriate legal, regulatory, fiscal and policy framework in place. To this end, there will need to be ongoing engagement between all of the relevant stakeholders and we are certainly very appreciative of the engagement we have had to date with Minister Ryan and his officials.” As part of the process of ongoing engagement with relevant stakeholders, the IBF has committed to review the Principles from time to time in order to reflect ongoing learning and emerging good practice. A copy of the IBF Climate Change Principles for the Financial Sector is available here.

Note to Journalists 
The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland.

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

Mortgage market continues to slow but some evidence of increasing activity, says IBF

  1. Net lending continues to grow – but at reduced levels
  2. First-time buyers share of market at record 21.4%
  3. Affordability continues to improve

The IBF/PwC Mortgage Market Profile published today shows that nearly 11,000 new mortgages to the value of some €2 billion were issued during the first quarter of 2009. While this shows that the rate of mortgage credit growth has eased significantly, at 4% the Irish market is still experiencing growth in net lending which contrasts with negative net lending in the UK, for example.

The volume of new lending in the first quarter (Q1) of 2009 is down 41.2% compared to the previous quarter and is down some 61% year on year – a trend which reflects the general economic environment, but also the seasonal pattern of lower mortgage lending in the first quarter of each year.

The following are among the key features of the Q1 2009 data:

First-time buyers (FTBs) increased, for the fourth successive quarter, their share of the overall market – albeit a smaller market. Their share by volume now stands at a record 21.4%, reflecting the relative resilience of this segment.
Affordability continues to improve for FTBs through lower interest rates and house prices as well as for existing borrowers – with IBF calculating that the monthly repayment on an average loan has fallen by €479 or 38% since Sept’08.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated:

“The general economic environment continues to be very challenging and, not surprisingly, this is reflected in the recorded slowdown in mortgage market activity. However, on a more positive note, the home-purchasing segments of the market remain the more resilient and affordability continues to improve strongly for them – whether as first-time buyers or mover purchasers. Furthermore, there are tentative signs of a pick-up in the level of applications to lenders which, if reflected in increased drawdown activity by borrowers, could be an early indication of increased market activity to come.”
The IBF/PwC Mortgage Market Profile can be viewed 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

Banks’ Support for Business

The Irish Banking Federation (IBF) strongly encourages all business people with viable, sustainable businesses to engage with banks about available business supports. There can also be significant benefits to businesses in obtaining appropriate professional financial advice.

Tighter credit standards due to greater risk perception and reduced loan demand due to the economic slowdown are evident in Ireland, just as they are right across Europe. However, banks here have funds available to support well-managed businesses through these difficult and challenging times.

Banks recognise the importance of SME businesses to their business and to the welfare of the wider economy and have variously committed support to the sector. This includes an additional €3 billion made available by a number of leading banks in recent months through various business support initiatives; as well as some €350 million in European Investment Bank (EIB) funds.

IBF Statement on ECB Rate Reduction

The latest move by the ECB to further lower the base rate is welcome in helping towards easing lending conditions for customers. Interest rates are a matter for individual institutions in a competitive environment – with due regard to the impact on the cost of funds, the interests of depositors as well as to their important role in supporting the wider economy. The benefit of previous interest rate reductions is reflected in Ireland’s being among the lowest in the euro area for average housing loan costs.