BANK of Ireland has ruled out providing debt forgiveness for struggling homeowners.
The move will come as a blow to the thousands of BoI mortgage holders who are in arrears and were hoping for some form of debt forgiveness under the new personal insolvency laws.
Last night, the bank's chief executive Richie Boucher categorically ruled out reducing a portion of the personal debt of any of its customers.
Mr Boucher said the new insolvency bill which is due to go through the Dail this week to tackle fast-growing arrears will not prompt the bank to provide debt forgiveness to struggling customers.
"It is not our money," he said.
"It is shareholders' and depositors' money.
"For the other government-owned banks, it is taxpayers' money – so it is a transfer of money from one group of taxpayers to another. Our first role is to responsibly maximise the amount of money we can recover."
This is in stark contrast to AIB and its subsidiary EBS. They have said publicly they are willing to look at forgiving some of the mortgage debt of those who can no longer meet the repayments.
Mr Boucher has also said the bank is "frustrated" by the government's decision to extend the bank guarantee into 2013, claiming the scheme is depleting the bank's capital.
The bank has said that the move will now cost the bank hundreds of millions of euro in additional fees.
Mr Boucher said they were preparing to come off the Eligible Liabilities Guarantee when they were told it would be extended.
" Bank of Ireland is ready to come off the guarantee and we were prepared for coming off on December 31," he said.
"The delay in timing is frustrating for the bank and is something we are keeping a very close eye on and we are having dialogue with the authorities on."
The guarantee was introduced in December 2009 to protect all deposits of over €100,000. However, the banks must pay interest fees for the guarantee.
BoI paid €449m in 2011 for the guarantee and is lobbying for its withdrawal. However, last week the European Commission approved a request for its extension until the end of June 2013.
In an interview with the ' Financial Times', Mr Boucher said the guarantee was brought in on a "systemic basis" and the bank required permission to come off the scheme.
"It is expensive and we don't believe it adds a lot," he said.
BoI is the only Irish bank to escape state control following the banking crisis.
The State currently has a 15pc stake in it. It is attempting to rebuild its business and just last month it successfully raised €1bn on the bond market in its first bond deal for two years. In an even more crucial move, BoI raised €250m by selling subordinated bonds to investors.
Mr Boucher characterised his bank's relationship with the Government as "greater than 80-20 in alignment", but he acknowledged there were "areas of frustration".
He said the bank was making progress despite a tough interest rate environment in Europe.