Banking on Sustainability

BPFI is delighted to announce its first full conference dedicated to implications of climate change for banking in Ireland.

The BPFI Banking on Sustainability half day Conference , in association with Deloitte, will take place on Thursday 24th October from 9.00am – 1.00pm in the BPFI Conference Centre.

The Conference will provide delegates with a unique opportunity to consider the implications of climate change for the financial services sector in Ireland. This BPFI event will provide insights into changes to the financial services framework to support the transition to a low-carbon, more resource-efficient and sustainable economy, the integration of climate-related risk into banks’ risk management and strategy, and banks’ experience to date

Climate change requires a global perspective and local action: How will the European Union’s ambition to deliver on the commitments of the Paris Climate Agreement and the UN Sustainable Development Goals impact on financial services providers? What is current thinking on the incorporation of effective climate risk management in banking? Ireland now has its Climate Action Plan – what are the opportunities and challenges inherent in in de-carbonising the economy?

The half-day seminar will feature expert presentation and discussion on sustainable finance, ensuring the climate resilience of assets, impending supervisory response, finance for energy efficiency products and best practice in banking.

Pat Cox, Chair of Green Finance Ireland Committee and former President of the European Parliament, will be one of our key note speakers, along with Oliver Wyman on Climate Risk; European Banking Authority on the forthcoming EU Legislation on Sustainable Finance; BNP Paribas on the integration of sustainability into a bank and sponsor Deloitte on de-carbonising the Irish economy, among other panellists.

Bookings

For individual bookings, please click on the ‘Book Now’ button below. For organisations who wish to send several members of their team, we are pleased to offer further discounts for group bookings (applicable where all attendees are employed by the same organisation and are registered under one booking):

4 for the price of 3

7 for the price of 5

Borrower-Lender Engagement is Key to Finding Resolution to Mortgage Arrears

 

Constructive engagement with lenders is key to borrowers in mortgage arrears finding workable resolutions, according to Banking & Payments Federation Ireland (BPFI); and in many cases this enables people to stay in their homes.

The most recent figures from the Central Bank of Ireland show that some 94,000 private dwelling home (PDH) mortgage accounts were restructured at end-June ’19; and the vast majority of these are working for both borrower and lender in that almost 4 out of 5 are not in arrears.

At the same time, some interesting statistics arise from an analysis of the most recent report from the Housing Agency (Q2 2019) on the operation of the Mortgage to Rent Scheme – which enables distressed borrowers to stay in their homes.

  • Of the total 4,712 cases submitted to the Scheme since its inception (in 2012)
    • 527 cases have been successfully completed; and
    • a further 1,058 cases are being actively considered
  • The Scheme is being supported by BPFI members – through a wide range of institutions that includes the main retail banks and credit servicing firms. All are offering Mortgage to Rent as a solution to borrowers who engage.
  • The Scheme is being operated by City and County Councils all over the country
  • The eligibility criteria for the Scheme were further expanded by the Department of Housing, Planning and Local Government as and from July 1st

BPFI has updated and reissued its guide, Important Information to help people in mortgage arrears, to further encourage distressed borrowers, or their trusted representatives, to engage with lenders – the guide can be downloaded here.

Commenting on the figures, Brian Hayes, BPFI Chief Executive, stated:

“We appeal to all people in mortgage arrears to contact their lender as soon as possible if they haven’t already done so; or to contact a trusted third party such as the Money Advice and Budgeting Service (MABS) among others.  The Housing Agency figures show that over 500 individuals/families are thankfully still in their homes today by having done so; while Central Bank figures show that some 94,000 borrowers are better able to manage their mortgage repayments. The recent arrival to the market of Home for Life is a welcome addition to the choice of bodies offering Mortgage to Rent (MTR) – such as Home Options, iCare and a range of Approved Housing Bodies.  Together with the recent widening of the eligibility criteria, this should help to significantly expand the number of homeowners that can avail of MTR as a workable solution for them.” 

 

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: For further information contact Jillian Heffernan, Head of Communications, jillian.heffernan@bpfi.ie 087 9016880

Mortgage approvals in August showed continued year-on-year growth

Almost 4,400 mortgages to the value of €968 million were approved in August

Some signs of slower growth in August in comparison to previous months of the year.

Banking & Payments Federation Ireland (BPFI) has published the latest figures from the BPFI Mortgage Approvals Report for August 2019.*

The following are the key elements:

  • A total of 4,355 mortgages were approved in August – some  2,227 (51.1% of total volume) were for first-time buyers (FTBs) while mover purchasers accounted for 1,216 (27.9%).
  • The number of mortgages approved rose by 4.1% year-on-year and fell by 15.1% month-on-month.
  • Mortgages approved in August 2019 were valued at €968 million – of which FTBs accounted for €500 million (51.7%) and €309 million (31.9%) by mover purchasers.
  • The value of mortgage approvals rose by 4% year-on-year and fell by 16.7% month-on-month.

Re-mortgage/switching approvals fell in volume by 8.7% on the previous month and of 14.9% year on year.

Commenting on the figures, Brian Hayes, BPFI Chief Executive, stated:

“We have seen significant volatility in monthly mortgage approvals figures over the summer months and July may have been an outlier but the latest approval figures indicate continued year-on-year growth in mortgage lending in overall terms. First-time buyers were again the fastest growing segment, up 12.5% by volume and 14.7% by value. Mortgage lenders are supporting home ownership with more than 24,000 FTB mortgage approvals in the past twelve months. The Help to Buy scheme has been a key support for FTBs, with an estimated nine out of ten FTBs using the scheme. To avoid a slowdown in housebuilding, we strongly recommend that the scheme be extended in the Budget for a clearly defined period to provide the certainty that is needed going forward.”

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 August 2019  as well as the time series data file is available on the BPFI website HERE.

[*] The full time series of monthly data from January 2011 onwards is available on the BPFI website.

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: For further information contact Jillian Heffernan, Head of Communications, jillian.heffernan@bpfi.ie 087 9016880

Older Irish people losing almost six times more money to scammers than younger generation – FraudSMART Survey

€1,320 average stolen by fraudsters among over 55s

Former Government Minister Mary O’Rourke launches Fraud Awareness Week: 23-29 September 2019

A new FraudSMART survey from Banking & Payments Federation Ireland (BPFI) today reveals the average sum of money stolen in Ireland by fraudsters is €1,005, but the figure rises to €1,320 among older people aged 55+ and is almost six times the amount stolen from young adults aged 18-24, which totalled €228. On average, a third (33%) of Irish people say they have lost money to a fraudster.

The survey comes as Fraud Awareness Week gets underway from 23rd – 29th September 2019 www.fraudSMART.ie with people encouraged to ‘check, chat and challenge’ a loved one this week on the issue of financial fraud scams and identity theft, especially our youngest, oldest and most vulnerable family and friends. Helping to launch this year’s Fraud Awareness Week is former Government Minister Mary O’Rourke, who is urging older people in particular to talk to family and friends about their concerns and, equally so, remind young adults that they have a sounding board in grandparents and older relatives for any worries or concerns. Learning to spot the signs of fraud early and act quickly is a skill that applies to all ages.

The FraudSMART survey for Fraud Awareness Week 2019 looks at the issue from a generational perspective for the first time, and reveals the following trends and behaviours among older people and how those behaviours compare with younger adults, who are often just as vulnerable:

FREQUENCY: One in five (22%) older people are targeted at least weekly by attempts to defraud them, making them just as likely to be targeted as young adults, underscoring the fact that fraud can and does happen at any age.

REPORTING FRAUD: Over 55s are most likely to report fraud attempts to the authorities, with 38% contacting their bank and/or the Gardai. This compares to just 14% of young adults aged 18-24. Almost half (45%) of older people make a point of telling family, friends and colleagues about their experience. Significantly, they are the only age group not to report feeling embarrassed for being targeted by scammers in the first place.

CHANNELS FOR FRAUD: Older people are most likely to be targeted via email (37%), but phone calls to landlines accounted for nearly one in three (28%) fraud attempts among the group. More than one in ten (13%) reported getting rid of their landline/changing their phone number to help combat the issue. While calls to mobiles (20%) and text messages (9%) are also an issue, older people are no more susceptible than any other age group to fraud committed by a “person calling to the door” at just 3%.

ALERT TO MONEY MISSING: However, over 55s were slowest of all age groups to realise when money or personal details had been stolen. On average, one-third (37%) of Irish people notice within 24 hours compared to just one in four (26%) older people within the same timeframe.

CHANGING BEHAVIOURS: Notwithstanding the slower response time, older people reported taking more proactive measures to protect themselves from fraud online and in person. More than two-thirds (68%) now keep a closer eye on their bank account (versus younger adults at 42%). More than a third (36%) regularly change passwords on email and online accounts they use regularly compared to younger people (18%). In addition, 40% of older people said they avoid using public wi-fi, almost double the figure for young adults that responded (22%).

In person, 70% of over 55s cover their PIN and check for shoulder surfers (versus 51% of young adults), and they are twice as selective about giving out personal details (61% v 30% of young adults) and the most resolute about not letting their bank card out of sight when paying in shops and eateries. Almost half (46%) always keep their card in sight, more than any other age group surveyed.

Niamh Davenport, who leads the BPFI FraudSMART programme, said: “Our FraudSMART survey still shows reluctance among some older people to ask a family or friend for a second opinion if something looks suspicious. That’s what Fraud Awareness Week 2019 is all about – having the conversation. We all know someone who has been scammed, young or old, but it’s only by checking with each other that it becomes easier to spot the trends and tell-tale signs of fraudsters at work. It’s one thing to know the signs yourself, but it’s much more powerful to help those you love understand them too.”

Former Government Minister Mary O’Rourke said: “I myself have been targeted by scams over the years, from calls to my landline looking to fix a problem with my computer to emails pretending to offer tax refunds. My advice, especially for older people, is to learn the warning signs so that you can act at the time. My grandchildren are in their teens now and their age group is just as susceptible as mine. It really is an issue that affects all of society, so I am delighted to launch Fraud Awareness Week and be part of the national conversation on such an important topic.”

Also supporting Fraud Awareness Week 2019 is Active Retirement Ireland, as advocates for retired people in Ireland striving to live full and active lives.

Kay Murphy, President of Active Retirement Ireland, said: “Notwithstanding the fact that fraud happens and the sums of money involved are significant when it does, it’s encouraging that many older people are proactive, especially when it comes to speaking up and taking measures to protect themselves from scams. That said, there’s always more to learn and by partnering with FraudSMART for Fraud Awareness Week, we will be working to bring that message directly to our 25,000 members around the country over the coming weeks.”

Regional FraudSMART Clinics

As part of Fraud Awareness Week, Active Retirement Ireland and its members will join BPFI for a series of FraudSMART Clinics aimed at helping members of the public, especially older citizens, learn more about current trends in bank fraud, online scams and identity theft, as well as the safeguards to put in place and ways to stay safe. Each FraudSMART Clinic will include a mixture of presentations, panel discussion, Q&A and advice from representatives of FraudSMART, An Post, the Gardai and the country’s main retail banks, including AIB, Bank of Ireland, KBC, Permanent TSB and Ulster Bank.

The events, which are open to members of the public and free to attend, will take place as follows:

LOCATION DATE VENUE TIME
DUBLIN 23 September 2019 BPFI, Floor 3, One Molesworth Street, Dublin 2 11am
CORK 26 September 2019 River Lee Hotel, Western Road, Cork City 11am
WEXFORD 4 October 2019 Talbot Hotel, The Quay, Whitewell, Wexford 11am
ATHLONE 7 October 2019 Radisson Hotel, Northgate Street, Athlone 11am
SLIGO 8 October 2019 Clayton Hotel, Clarion Road, Ballinode, Sligo 11am

 

Places are limited and assigned on a first come. Walk-ins welcome but registering in advance is recommended by emailing RSVP@fraudsmart.ie with your name and preferred location.

 

For reference:
Karen Jones, Gibney Communications, 01 661 0402 / 086 866 4501
Trisha Cusack, Gibney Communications, 01 661 0402 / 086 739 6381
Conor Sheridan, Gibney Communications, 01 661 0402 / 086 031 0800

Notes to Editors

  • Research was carried out by Core on behalf of BPFI FraudSMART in May 2019, using a nationally representative omnibus sample of 1,000 adults. More than 330 survey respondents were aged 55 and over.

About FraudSMART: FraudSMART is a fraud awareness initiative developed by Banking & Payments Federation Ireland (BPFI) in conjunction with the following member banks, Allied Irish Bank plc, Bank of Ireland, KBC Bank Ireland, PermanentTSB, Ulster Bank and An Post. The programme aims to raise consumer and business awareness of the latest financial fraud activity and trends and provide simple and impartial advice on how best they can protect themselves and their resources. www.fraudsmart.ie

About BPFI: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here. www.bpfi.ie

Budget could be used to help consumers and SMEs on greater energy efficiency

As part of its pre-Budget submission published today, Banking & Payments Federation Ireland (BPFI) is today advocating for state funded sustainability grants to be extended and made more widely available for consumers and businesses.

The submission makes a series of key recommendations including the incentivising of home owners and landlords to undertake deep-retrofits and extending supports such as the Carbon Footprint Grant and Project Assistance Grant to all SMEs.

“Given the challenges faced by the country in terms of upgrading the energy efficiency of the older housing stock, there is a need to incentivise home owners and landlords to undertake deep-retrofits which are expensive and beyond the means of many people, unless Government support is provided”, states Brian Hayes, BPFI Chief Executive.

“The same is true for micro and small SMEs that need to deep-retrofit factories, warehouses, supermarkets, farms, offices etc. While there are currently an excellent range of grants available, piecemeal energy saving solutions are unlikely to bring houses up to the energy rating targets necessary to meet Ireland’s climate action targets.”

“BPFI is strongly supportive of the Government’s Climate Action Plan 2019 and banks are actively responding to the ‘green’ challenge by developing ‘green’ propositions and products in order to meet the financing needs of borrowers wishing to upgrade homes and commercial premises.”

In summary, BPFI believes that Government should consider addressing the following (details are in the Appendix below):

  • Home Renovation Scheme
    • The planned Government policy to upgrade c. 500,000 homes, focuses on deep-retrofit where necessary to reduce carbon emissions but is expensive and beyond the means of many people, so clear incentives required.
    • State support under such a scheme should be extended also to SMEs to enable them to develop a cohesive decarbonization policy across the entirety of their businesses
  • Carbon Footprint Grant
    • Give consideration to extending a grant like this to all SMEs as it would raise awareness of the SME’s carbon footprint and identify key hotspots that they could prioritise for action in ‘greening’ their businesses.
  • Projects Assistance Grants
    • Give consideration to extending project assistance grants to support all SMEs

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 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 or jillian.heffernan@bpfi.ie

Appendix: Details of BPFI Pre-Budget Submission

Home Renovation Incentive

The Home Renovation Incentive Scheme (HRI) which expired on 31/12/18 allowed homeowners and landlords to claim a tax credit of 13.5% over 2 years, of the total qualifying expenditure on repairs, renovations and improvements up to a value of €30,000.

While the SEAI has an excellent range of grants available under the Better Energy Homes scheme, piecemeal energy saving solutions are unlikely to bring houses up to the energy rating targets necessary to meet Ireland’s climate action targets. Given the challenges faced by the country in terms of upgrading the energy efficiency of the older housing stock, there is a need to incentivise home owners and landlords to undertake deep-retrofits which are expensive and beyond the means of many people, unless Government support is provided. The same is true for micro and small SMEs that need to deep-retrofit factories, warehouses, supermarkets, farms, offices etc.

We suggest that the planned Government policy to upgrade c. 500,000 homes, should be focused on deep-retrofit and that state support under such a scheme should be extended also to SMEs to enable them to develop a cohesive decarbonization policy across the entirety of their businesses.

Carbon Footprint Grant

Enterprise Ireland clients engaged in manufacturing or internationally traded services can receive grant support towards the costs of measuring the carbon footprint of their business and identify and adopt strategies to manage/reduce emissions.

We recommend that consideration be given to extending a grant like this to all SMEs as it would raise awareness of the SME’s carbon footprint and identify key hotspots that they could prioritise for action in ‘greening’ their businesses.

Project Assistance Grants

For businesses and public sector bodies spending over €250,000 per year on their energy bills, SEAI grants are available to help them develop projects to reduce energy consumption and costs as follows:

Feasibility Study and Project Energy AuditUp to 50% funding to a maximum of €15,000

Final business case and project delivery support grantUp to 75% funding to a maximum of €15,000 where basic energy performance arrangements are considered and up to €37,500 where energy performance contracting (EPC) is considered

We recommend that consideration be given to extending the above type of support to all SMEs.

Household incomes struggle to finance accommodation as housing costs approach previous peaks – BPFI Housing Market Monitor

The latest Housing Market Monitor Q2 2019 published today by Banking & Payments Federation Ireland (BPFI) shows that, as average housing prices move ever closer to the peak of the previous cycle, the pressure on household incomes to meet the cost of accommodation is ever increasing.

Drawing on BPFI’s unique loan-level data as well as a range of published data for its assessment of the current state of the housing market, the latest BPFI Housing Market Monitor draws attention to some key findings as follows:

  • Whereas First Time Buyers (FTB) with incomes exceeding €80,000 per year accounted for 15% nationally and 27% in Dublin of all FTB mortgages drawn down in 2004, these ratios had risen to 36% and 53% respectively by the end of 2018.
  • Whereas 15% of FTB mortgages with incomes exceeding €80,000 were joint drawdowns in 2012 this had increased to around 32% in 2018.

The FTB Mortgages by Borrower Income graph below provides more detail.

BPFI’s Chief Economist, Dr. Ali Ugur, contends that this trend is due to a combination of limited housing supply, high and rising housing costs (including rents) and relatively slower income growth which have made it more difficult for those on low or medium incomes to borrow at current price levels within the restrictions of the Central Bank of Ireland’s macroprudential rules – introduced to enhance the resilience of both borrowers and lenders.

FTB Mortgages by Borrower Income

Sources: Department of Housing, Planning and Local Government (2004,2008), BPFI (2012, 2016, 2018)

 

It’s not only in the house purchase market that these pressures are evident, according to Dr. Ugur. He points to data from the Residential Tenancies Board and the Central Statistics Office showing that average weekly earnings were able to cover around 94% of monthly rents at the beginning of 2012, but only 65% of average monthly rents nationally by the first quarter of 2019.

Referring to the situation on overall housing supply, Dr Ugur states:

“The mismatch between current demand, as well as pent-up demand, and the supply of new homes seems to have brought average sales prices relatively close to the peak of the previous cycle in terms of sale prices.  The same mismatch also seems to be affecting rental accommodation in pushing up private sector rents where we have significantly surpassed peak rents from the previous cycle, notwithstanding the fact that rent increases seem to be stabilising.  Meanwhile, average income levels in the economy have not increased to the same extent during the period and affordability in the context of the macroprudential rules seems to be having an effect on demand at price levels at which the construction industry seems able to profitably operate.”

The BPFI Housing Market Monitor is available on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

The BPFI Housing Marking Monitor is published quarterly. In addition to presenting a unique range of loan-level data, the Monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents, and housing transactions in its assessment of the current state of the housing market.

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Strong SME Focus in Pre-Budget Submission from Banking & Payments Federation

There is a particularly strong SME focus in this year’s pre-Budget submission from Banking & Payments Federation Ireland (BPFI).  The submission makes a series of proposals to enhance a number of existing provisions that would greatly benefit small and medium-sized businesses all over the country.

The areas identified include the Employment and Investment Incentive (EII) Scheme, the Key Employee Engagement Programme (KEEP), the Research & Development Tax Credit, the Accelerated Capital Allowance Scheme and the Capital Gains Tax Entrepreneur Relief.

“With so much concern around how Brexit is likely to impact on the economy, it is important that every support possible is provided to the SME sector which, as everyone acknowledges, is the backbone of our economy”, states Brian Hayes, BPFI Chief Executive.

We recognise that a great deal is already being done by Government and various State agencies to help make our SMEs more resilient in the face of the challenges presented by Brexit, potential trade wars and other factors.  At the same time, we also recognise that some SMEs could themselves do more to harness the various supports that are already in place.  However, while acknowledging the fiscal constraints under which the Government finds itself, we believe that some adjustments to existing measures would be particularly impactful for businesses – and for our indigenous business sector in particular.”

In summary, BPFI believes that Government should consider addressing the following (details are in the Appendix, available here):

  • Employment & Investment Incentive Scheme (EII)
    • Increase the annual investment limit to more attractive levels
    • Investors should be eligible for full tax relief at the time of the investment
    • Gains in the value of shares should be subject to capital gains tax rather than income tax
    • Where capital losses are incurred by investors they should be eligible to claim loss relief.
  • Capital Gains Tax Entrepreneur Relief
    • In order to incentivise entrepreneurial investment, particularly in the context of Brexit and the potential for UK business investment in Ireland, the lifetime limit of €1.0m should be increased; also, the condition for the investor to have worked over 50% of the time in a managerial or technical capacity in the business for three out of the previous five years should be removed.
  • Key Employee Engagement Programme (KEEP)
    • Provide guidance on the process of share valuation to assist employers in determining accurate share valuations without undue administration
    • Amend the scheme such that employees can work across other companies within a group and they would still qualify in meeting the minimum working time requirement
    • Reduce the minimum working time requirement to facilitate access for part-time workers
  • Research & Development (R&D) Tax Credit
    • This important R&D Tax Credit should be reviewed to allow SMEs claim the full 25% tax credit for outsourced R&D. Also, the cashflow aspect of the tax credit should be enhanced so that it’s more attractive for smaller SMEs to undertake R&D.
  • Accelerated Capital Allowance (ACA)
    • Pending the proposed National Digital Strategy, and to accelerate investment by SMEs in digitalisation, consideration should be given to extending the current ACA in place for energy efficient products and equipment to targeted digitalisation investments such as robotics, computer aided machinery or such other digital projects to enable SMEs to make the necessary investment in digital transformation.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 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 or jillian.heffernan@bpfi.ie

BPFI Dispels the Myths Around the Sale of Non-Performing Loans

Process is delivering workable solutions for both lenders and borrowers

“The sale of non-performing loans (NPLs) to third-party investment funds provides benefits for banks and protection for borrowers”, states Brian Hayes, BPFI Chief Executive, on the publication today of a paper presenting the facts and dispelling the myths about the process.

“Our banks have made significant progress in reducing their NPL ratios in recent years and further progress continues to be made in accordance with plans agreed with the European Central Bank Single Supervisory Mechanism.  The extent to which this is contributing to healthier bank balance sheets is good not just for banks but for the wider economy which depends on banks for personal and business lending.  At the same time, the Central Bank of Ireland, with the support of the Oireachtas, has ensured that the protections afforded to borrowers by the relevant Codes, including the Code of Conduct on Mortgage Arrears, travel with the loans.”

BPFI’s Chief Economist, Dr Ali Ugur, states:

“Unfortunately, a number of false claims made about the NPL sales process have created unhelpful myths.  We believe it’s important to dispel those myths by illustrating the way in which the process provides one of a number of very important solutions to the management and resolution of mortgage arrears. We know from talking to various firms, on both sides of the NPL sales process, that the process is delivering workable solutions for lenders and borrowers alike.”

The BPFI paper, “Sale of Non-Performing Loans to Investment Funds: Benefits to Banks and Consumer Protections” explains the process of NPL sales and provides the most recent figures.  It also tackles head on various false claims made about the process, such as:

  • Claim: borrowers do not have the same protection when their loans are sold on by banks
    Fact: Borrowers do have the same protection
  • Claim: Investment funds do not offer to borrowers forbearance measures similar to those from banks
    Fact: Investment funds do provide a wide range of forbearance measures to borrowers
  • Claim: Ireland is facing a ‘tsunami of repossessions’
    Fact: Repossession here are low by international standards
  • Claim: Investment funds do not facilitate arrangements for borrowers
    Fact: Investment funds do put arrangements in place for borrowers

The paper concludes that banks here have made significant progress in reducing their NPL ratios over recent years using various resolution tools including sale of NPLS portfolios; that during this process borrowers are fully protected; but that further important progress on this front is not helped by misleading claims.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 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 or jillian.heffernan@bpfi.ie