Mortgage Approvals – May 2014

The Irish Banking Federation has published the latest figures from the IBF Mortgage Approvals Report for the three months ending May 2014*.

The following are the key elements:

  • A total of 2,040 mortgages were approved in May, of which 1,888  (93%) were for house purchase.
  • The number of mortgages approved showed a year-on-year increase of 41.6% and a month-on-month increase of 14.3%.
  • The value of mortgages approved in May was €358 million of which €343 million (96%) was for house purchase.
  • The value of mortgage approvals increased by 46.7% year-on-year and by 16.6% month-on-month.

Data collection for the IBF Mortgage Approvals Report began in August 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The report is available for download here.

*All figures are based on the three-month moving average.  Year-on-year compares the average for the three months ending May 2014 with the three months ending May 2013.  Month-on-month compares the average for the three months ending May 2014 with the three months ending April 2014.

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Note: The Irish Banking Federation (IBF) is the principal voice of 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.

Contact: Jillian Heffernan Marketing Communications Manager, IBF, Ph: 01 4748835 / 087 9016880

Strong Growth in New Mortgage Approvals Continues in May

  • Approvals up 20% overall on a monthly basis and 4.9% year-on-year

The level of new mortgage approvals continued to increase in May as confirmed by the latest figures from the IBF Mortgage Approvals Report which tracks the number of new mortgages approved by mainstream lenders.

The report shows that a total of 1,722 mortgages were approved by lenders here during May 2013 to the value of €294 million.  This represents a volume increase of 20% and a value increase of 22.2% compared to the previous month; it also represents a volume increase of 4.9% year-on-year.

The vast majority of mortgage approvals (92%) were for property purchase, growing by 20.6% in May over the previous month and by 8.7% year-on-year. With the total value of mortgage approvals for house purchases standing at €282 million in May, the average mortgage approval value for the purposes of house purchase was €178,751 – up 2.4% on the same period last year.

With the total value of mortgage approvals for house purchases standing at €282m million in May, the average mortgage approval value for the purposes of house purchase was €178,751 – up 2.4% on the same period last year.

IBF welcomes the continued growth in mortgage approvals during the month of May and hopes to see this trend sustained. The steady rise in the level of approvals seen over the last number of months is a strong indication of renewed activity in the market.  It can be expected that this positive trend will be reflected in future mortgage drawdown figures for the current quarter

Data collection for the IBF Mortgage Approvals Report began in August 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders.You can find the latest report here.

Note: The Irish Banking Federation (IBF) is the principal voice of 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.

Contact: Jillian Heffernan, Marketing Communications Manager, ph: 01 474 8835 / 087 9016880

Revised Code of Conduct represents a significant step to addressing mortgage arrears

Changes announced by the Central Bank today (27th) to the Code of Conduct on Mortgage Arrears (CCMA) represent a significant step in enabling mortgage lenders to seek long-term resolutions for distressed borrowers. The revised Code is one of a range of important policy measures – a number of which are still in the pipeline – that will enable borrowers and lenders to effectively address the considerable challenge presented by mortgage arrears

Early and constructive engagement between borrowers and lenders is central to putting resolutions in place for customers in mortgage arrears.  In introducing revised provisions relating to the basis of lender contact with the borrower and clarification of what is meant by a non-cooperative borrower, the Central Bank Code better facilitates early and constructive engagement, while retaining important provisions for protection of the borrower.  In light of revisions to the moratorium period, it should be noted that the process of realising security through the courts is a lengthy one which can take a number of years, and that prior to any such proceedings being initiated, the lender will have made every effort to agree a sustainable and workable solution within the mortgage arrears resolution framework.

While growth in early stage mortgage arrears continues to slow – as confirmed by the latest Central Bank statistics – the overall stock of arrears is still growing and is likely to continue to grow further this year.  This presents a considerable challenge for borrowers and lenders alike and banks remain fully committed to addressing this challenge.  The overriding objective for IBF members remains the same: to maximise the number of sustainable mortgages and thus help the greatest number of people possible to remain in their homes.

In order to effectively meet this objective in addition to the policy priorities determined by the authorities, lenders require the full range of tools to be made available to them, one of which is a revised CCMA.  However, other key tools have yet to be finalised and thus remain outside of the control of lenders; these include the enactment of legislation to remedy the impact of the Justice Dunne judgment, modernisation of the legal process in line with other jurisdictions, implementation by the Central Bank of a protocol which advocates the payment of secured over unsecured debt and implementation of the new personal insolvency regime.  IBF and its members eagerly await progress on these fronts.

IBF and our member banks will work closely with the Central Bank in the implementation of the revised Code to ensure that the significant changes which are required will facilitate best practice for lender engagement with distressed mortgage borrowers.

Note: The Irish Banking Federation (IBF) is the principal voice of 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.

Contact: Jillian Heffernan, Marketing Communications Manager, ph: 01 474 8835 / 087 9016880

Best Practice in Mortgage Arrears – 27th June 2013

Pictured L to R: Bernard Sheridan, Central Bank, Louise O’Mahony, IBF, Lorcan O’Conor, Insolvency Service of Ireland and Patricia Richard-Clark, Solicitor & Former Commissioner of the Law Reform Commission

The aim of the session was to provide delegates with a clear insight into best practice engagement with the distressed mortgage borrower in the context of the broad range of solutions now available. It also sought to examine the changing regulatory landscape and explore how lenders can best adapt while continuing to engage with customers to deliver best outcomes for both lenders and borrowers.

Positive trend in SME credit demand study are welcome, says IBF

The Department of Finance/Red C SME Credit Demand Survey published today shows a welcome continuation of gradually improving trends in the SME sector and in credit demand.

While credit demand remains low because of the difficult trading conditions facing many SMEs, the slight increase from 39% to 40% in the percentage of SMEs requesting credit is welcome; as is the 76% application approval rate (full and partial).  It is notable, but scarcely surprising, that approval rates continue to be strongly linked to business performance and viability.

One of the more significant changes coming through in the research findings is the shift in attitudes to lending among SMEs, with 46% (up from 38%) of SMEs believing that banks are lending.  This is a positive development.  Through on-going co-operation with business representative bodies and other relevant stakeholders, IBF and member banks are working to help drive further positive change in this perception.

Some three quarters (74%) of credit applications are formal, with a slight increase (three percentage points) in the number of informal applications.  IBF and our member banks continue to strongly encourage SMEs to formally apply for credit where they feel they have a good proposition and to provide all relevant supporting documentation.  As the research confirms, formal applications are more likely to be approved than informal requests.

Note: The Irish Banking Federation (IBF) is the principal voice 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.

Contact: Jillian Heffernan, Marketing Communications Manager, ph: 01 474 8835 / 087 9016880

IBF and An Garda Siochana launch new crime prevention initiative BanknoteWatch.ie

The Irish Banking Federation, in association with An Garda Síochána, An Post, Credit Unions and Cash-in-Transit partners have launched BanknoteWatch.ie, a new crime prevention initiative aimed at preventing the circulation and use of dye stained stolen banknotes.

Officially launched by the Assistant Garda Commissioner, Derek Byrne, National Support Services, BanknoteWatch.ie is an awareness campaign developed to promote the fact that a dye-stained banknote is probably a stolen banknote and that such dye stained banknotes are the proceeds of crime.

The campaign, which encourages the immediate withdrawal of dye-stained notes from circulation, aims to inform and educate the general public and retailers as to how to recognise a dye stained note and the protocols to be followed in relation to such notes stolen or in circulation as a result of commercial robberies.

BanknoteWatch Launch

Assistant Garda Commissioner, Derek Byrne, National Support Services and Keith Gross, Chairman of BanknoteWatch.ie, IBF, pictured at the launch of the BanknoteWatch.ie crime prevention initiative

Speaking at today’s launch, Assistant Garda Commissioner, Derek Byrne, National Support Services said: “We all recognise that it is vitally important that we work together and take whatever steps necessary to make it as difficult as possible for criminals to profit from their often violent, illegal activity. The aim of Banknotewatch.ie is to prevent criminals from profiting from the proceeds of crime and reduce the risk of businesses becoming the victim of commercial robbery. To serve this goal we have a common aim. This is about protection for all, businesses, the financial sector, security services and the general public.”

Keith Gross, Financial Crime and Security, IBF and Chairman of BanknoteWatch.ie, added: “BanknoteWatch Ireland is a national crime prevention initiative and a partnership between An Garda Síochána, members of the IBF, An Post, Credit Unions and Cash in Transit operators, G4S and Brinks Ireland. The message of this campaign is that an ink stained note is probably a stolen note. In the unfortunate event of a commercial robbery, these systems ensure that any cash stolen is permanently stained making it difficult for the criminal to use. The primary reason for the implementation of these systems is to safeguard those people involved in the day to day delivery of cash in Ireland. Getting the message out to the public and retailers that these systems are in place and that stained notes are stolen notes will assist in preventing criminals from profiting from the proceeds of crime and reduce the risk of businesses becoming the victims of commercial robbery.”

Further information on the campaign can be found at www.banknotewatch.ie

IBF points to welcome in slowdown in early mortgage arrears

In response to the publication of the latest Central Bank statistics on mortgage arrears today, the Irish Banking Federation has pointed to the welcome slowdown in growth of early mortgage arrears.

While the total number of mortgage accounts for principal dwelling houses (PDHs) in arrears has increased, reflecting the difficult economic circumstances faced by a sizeable number of customers, the decline in early-stage arrears shows that the pace of that increase is further slowing.

Today’s figures show that 79,689 PDH mortgage accounts had been restructured at the end of Q1 2013, an increase of 1.8% on the previous quarter. Significantly, the Central Bank data shows that 76% of these restructured accounts were meeting the terms of their arrangements. Similarly, some 78% of the 21,504 restructured buy-to-let (BTL) mortgage accounts were also meeting the terms of their arrangements.

Some 31,000 new restructure arrangements – 24,706 PDH accounts and 5,897 BTL accounts – were put in place during the first quarter of this year. This figure, along with the overall increase in restructured PDH mortgage accounts, is testament to banks’ commitment to working with distressed customers and emphasises the importance of full and constructive engagement by borrowers with their lenders so that workable sustainable solutions can be fully formalised.

Note: The Irish Banking Federation (IBF) is the principal voice of 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.

For further information contact:
Jillian Heffernan, Marketing Communications Manager, ph: 01 474 8835 / 087 9016880

Central Bank figures on SME lending show underlying growth over time

  • 13.8% growth year on year

New lending drawn down by SMEs during Q1 2013 grew by 13.8% year-on-year to €464 million, according to figures published by the Central Bank of Ireland today.  This represents the second consecutive quarter of year-on-year growth (although Q1 2012 was quite weak).  The average quarterly level of lending over the past year rose above €500 million for the first time since Q1 2012.

The seasonality factor in business borrowing accounts significantly for the reduction in new lending as between Q4 2012 and Q1 2013.  Q1 tends to be one of the quieter quarters in the year while Q4 is typically the strongest.

While the Central Bank figures also show that total credit outstanding to SMEs fell by 4.6% over the year, this reflects the fact that businesses are repaying existing debt more than they are taking out new credit.

SME demand for new credit has been subdued, but there are some signs of uplift and banks have the capacity to match demand as it increases.

Note: The Irish Banking Federation (IBF) is the principal voice of 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.