Friday 22 September 2017

Most struggling homeowners 'have been offered bank deal'

Richie Boucher admits bank made mistakes.
Richie Boucher admits bank made mistakes.

Louise Roseingrave

MORE than eight out of 10 struggling homeowners who have engaged with Bank of Ireland have been offered some sort of mortgage deal, chief executive Richie Boucher has said.

Mr Boucher said offers were made to 86pc of the 12,000 customers who filled out a standard financial statement – a document setting out borrowers' income and living costs.

Submitting a form is the first step on working out a deal with a bank.

Speaking at a Cork Chamber breakfast event, Mr Boucher said nine out of 10 owner-occupiers with a Bank of Ireland mortgage were successfully repaying their home loans.

Eight out of 10 mortgages servicing the buy-to-let market were "working", he added.

The figures were revealed as Mr Boucher announced that Bank of Ireland had returned to profitability and was now running a "large current account surplus".

Overall the bank's mortgage arrears were running at half the industry average, Mr Boucher said.

Some 60pc of the bank's owner-occupied mortgages were tracker mortgages.

Mr Boucher, who was appointed chief executive officer of Bank of Ireland Group in February 2009, admitted the bank made "huge mistakes" in the past but spoke of a new "momentum" arising out of signs of economic growth.

"There's a slow momentum starting to come through," he said, citing steady quarterly increases in employment.

"That's good for the absolute amount of revenue generated but there are still some social consequences," he said.

The construction and retail sectors still face "very difficult times" against a backdrop of growing consumer confidence and positive momentum, which Mr Boucher said was on the increase "albeit from very low levels".

"We had a very difficult problem in Bank of Ireland, we made a lot of mistakes. I was part of a team that made a lot of mistakes," he said.

Despite its mistakes, the bank is returning to profitability thanks to a diversification of its balance sheet and a lucrative deal servicing the UK's post office system.

"Our loan losses are continuing to reduce. We think that's a function of the diversification we had to start with, probably the fact that we didn't go quite as mad as other people did, we still made huge mistakes.

"The economy as a whole is improving and because we have been able to deploy our capital to restructuring a lot of our customers' loans, we're now able to restructure where their business objectives are in line with ours," he said.

LOSSES

Taxpayers recapitalised the bank with a €4.8bn cash injection in 2009, €4bn of which has been returned to the State. The State's 15pc share in Bank of Ireland is currently valued at €1.2bn.

"We got a huge dig out, with massive help from the taxpayer. When I came into the job I felt this was one of the most important things we had to achieve: reduce the risk, reward the risk and repay the risk," Mr Boucher said.

Bank bosses have reduced operating costs by 25pc over four years and the bank employs 6,000 fewer people than it did in 2009.

Bank of Ireland planned to continue to invest in branch networks and electronic payment systems, Mr Boucher said.

"We believe strongly in our branch network; it is vital that we have a business in every centre of commerce in Ireland."

Irish Independent

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