Mortgage Approvals – April 2017

Banking & Payments Federation Ireland (BPFI) has published the latest figures from the BPFI Mortgage Approvals Report for April 2017.*

The following are the key elements:

  • A total of 3,340 mortgages were approved in April 2017 – some 1,819 (54.5% of total volume) were for first-time buyers (FTBs) while mover purchasers accounted for 980 (29.3%).
  • The number of mortgages approved rose by 11.7% year-on-year but fell by 11.6% month-on-month.
  • The value of mortgages approved in April 2017 was €685 million – of which €366 million (53.4%) was accounted for by FTBs and €232 million (33.9%) by mover purchasers.
  • The value of mortgage approvals rose by 19.8% year-on-year and by 12.5% month-on-month.

Re-mortgage or switching approvals grew on a year-on-year basis with activity accounting for 8.2% of the value and 7.3% of the volume of mortgages.

Data collection for the BPFI Mortgage Approvals Report began in September 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The BPFI Mortgage Approvals Report February 2017  as well as the time series data file is available on the BPFI website here.

[*] Approval figures had previously been based on the three-month moving average.  From April 2017, the base monthly data is reported. The full time series of monthly data from January 2011 onwards is available on the BPFI website.

Note: Banking & Payments Federation Ireland is the voice of banking and payments 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, Head of Communications, 087 9016880

BPFI welcome Central Bank Governor, Philip Lane

Pictured above (L-R): Liam McLoughlin, Vice President BPFI and Chief Executive Retail Ireland Division, Bank of Ireland; Philip Lane, Governor, Central Bank of Ireland; Jonathon Lowey, President BPFI and Country Manager, Citadel Ireland

Banking and Payments Federation Ireland welcomed the Governor of the Central Bank, Philip Lane, to our Nassau Street offices this morning where he addressed a gathering of CEOs and senior-level executives from our retail and international member banks.

His address covered a wide range of areas, including Brexit, cybersecurity, governance and culture, as well as the impact of technological innovation on business models. Following his address, Governor Lane engaged with those in attendance in what was a highly useful Q&A session. The meeting was opened by BPFI President, Jonathon Lowey, who closed by thanking the Governor for taking the time to engage with member banks in this way.

EU-US Dialogue on regulatory developments

The EU and US administrations came together for a meeting of the EU-US Joint Financial Regulatory Forum in Brussels during March. These are bi-annual meetings to exchange views on regulatory developments. With regards to banking regulation, the US welcomed the European Commission’s proposed risk reduction package which suggests changes to the Capital Requirements Regulation (CRR), Capital Requirements Directives (CRD) and Bank Recovery and Resolution Directive (BRRD) to bring the legislation in line with international requirements and also make adaptations post-crisis. On Basel, both the EU and US advised that the outstanding issue is the output floor, with neither side willing to move. With regards to the impact of Brexit and Trump it was advised that in general between EU/US/UK there is much “high level thinking” around potential market fragmentation and on whether we can have an open financial system going forward.

Domestic and EU updates on Covered Bonds

The Asset Covered Securities (ACS) Legislation Project Working Group has relayed to the Department of Finance and Central Bank for their consideration its working draft proposals for amendments to the ACS legislations.

Separately, the EU Commission is expected to issue proposals around the harmonisation of the covered bond markets in June. At the European Covered Bond Council’s (ECBC) plenary meeting in Oslo in April, Didier Millerot, Member of the EU Commission, announced that the Commission would issue a statement in June regarding the extent to which it is in favour of harmonisation of the covered bond markets. This may include the announcement of an EU directive. From the Commission’s point of view, the scope of a potential harmonisation process would need to take into account the necessity of striking a balance between the advantages associated with harmonisation, and potential disadvantages for those markets which are already established and function well. This is being interpreted as an indication that, based on an EU directive and similar to the EBA’s proposal, the basic features of covered bonds may be regulated while specific requirements would remain at national level.

The European Commission’s Risk Reduction Package

The European Banking Federation’s (EBF) Crisis Intervention Working Group (CIWG), of which BPFI is a member, has finalised a detailed set of key messages and amendments relating to recovery and resolution issues in the European Commission’s package for Risk Reduction Measures. Some of the key messages include agreement with fast track of insolvency proposal and strong agreement with the changes proposed to the amended Article 55 – Contractual Recognition of bail-in: scope and waivers i.e. that the conditions for the waiver should not be (a) to (c) applied cumulatively, rather they should apply alternatively.

BPFI is broadly in agreement with the EBF response on Large Exposures amendments in the Risk Reduction Package. Some of the high-level comments include:

  • Calculation of the exposure value. Consistency must be ensured between the capital and the large exposure framework with regard to the exposure value calculation and the use of the Internal Model Method (IMM).
  • The denominator must be extended from Tier 1 to total eligible capital, while the definition of eligible capital must be reviewed.
  • Credit risk mitigation techniques. The mandatory substitution by the collateral provider under the comprehensive method must be discarded.
  • Sovereign exposures. The wording must be clarified in order to ensure that sovereign exposures must be exempted from the Large Exposures regime if they are incurred prior to 22 November 2016, or if they are assigned a 0% risk weight.

Negotiations continue on STS Securitisation

The fifth political trialogue on Regulations on simple, transparent and standardised securitisation (STS) took place in April. On the issue of risk retention EU Council member states were firm on maintaining the level of 5%, detailing that the evidence provided had not satisfied any deviation from the current  widely accepted risk retention framework in line with global standards. Related to this, the European Commission proposed to further consider the macro and micro-prudential supervisory dimension. The hierarchy of methods and third country regimes were not discussed. BPFI contributed significantly to the European Banking Federation’s joint letter on capital framework for STS Securitisation, sent to the European Commission, Council and Parliament in advance of the meeting of the Council’s Working Party on Financial Services dedicated to Securitisation last month.

Central Bank updates on AnaCredit

BPFI is actively engaging with members and the Central Bank to clarify and close off a number of issues regarding AnaCredit, the ECB’s project to collect loan-level data. The Central Bank updated its compilation notes in April. It also issued templates and rules covering non-counterparty data for banks. Separate templates will be issued for credit unions. The Central Bank had earlier held a joint AnaCredit/Central Credit Register (CCR) workshop at which it presented on its approach to the two projects and its efforts to align them, indicating that further workshops could take place. Separately, the European Central Bank released the first final version of the Bank’s Integrated Reporting Dictionary (BIRD), which aims to provide banks with a harmonised data model describing the data which should be extracted from their internal IT systems and the transformation rules for producing reports required by authorities.

Financial Services Brexit Sectoral Dialogue

BPFI and its affiliate FIBI (The Federation of International Banks in Ireland) were both represented at a recent Brexit Financial Services sectoral dialogue hosted by the Department of Finance. Minister for Finance, Michael Noonan, Minister of State for Financial Services, Eoghan Murphy and Second Secretary General in the Department of the Taoiseach, John Callinan were among those who addressed the dialogue, where the Central Bank of Ireland outlined recent updates in relation to Brexit.

Stakeholder Engagement

BPFI’s Director of Public Affairs joined with some 50 other stakeholders from across the socio-economic spectrum in an Open Policy Debate on National Risk Assessment organised by the Department of An Taoiseach, the purpose of which was to inform the updating of the Government’s National Risk Assessment strategy.  A number of expert presentations preceded an open discussion on a range of high risk factors.

Through its Director of Public Affairs BPFI contributed to judging the finals of the Get Up and Go Transition Year Minicompany Awards 2017, organised by the Professional Development Service for Teachers.  With the aim of developing a culture of entrepreneurship, the initiative involved school projects from all over the country competing across a number of categories including finance, marketing and innovation.