Monday 26 February 2018

AIB will ‘wipe debts of some Priory Hall apartment owners’

AIB boss David Duffy
AIB boss David Duffy

Chief executive David Duffy claims 2,000 of the bank’s customers in arrears have cash deposits, big enough to clear their mortgage debts

ALLIED Irish Banks has said it will offer to wipe debts of some of the former residents of the condemned Priory Hall complex.

David Duffy, chief executive of the bailed out lender, said moratoriums had been placed on 27 accounts of customers who took out mortgages for properties in the north Dublin estate, 18 of whom were buying their own home.

"Frankly, we are very sympathetic because this isn't an issue that is typical of the circumstances that we're dealing with," Mr Duffy said.

"It has taken too long and I don't think it's going to resolve itself satisfactorily soon. We will negotiate an individual solution with them, up to and including debt write-down if the circumstances warrant it."

Earlier, Environment Minister Phil Hogan said the Government was open to the idea of demolishing and rebuilding the north Dublin house and apartment complex that was found to be a fire hazard.

Ursula Graham, spokeswoman for the residents, said they would welcome any state assistance.

"We are very angry that Phil Hogan chose a public platform to communicate to us. We have been asking since 2011 to meet up and he has refused to meet," she said.

Ms Graham, who was forced out of her home in October 2011 and into a house in Belmayne paid for by Dublin City Council, said there was no justification in ministers refusing to meet residents because of ongoing lawsuits.

The council has been housing 41 Priory Hall families since it was evacuated almost two years ago and has committed to keeping roofs over their heads until November. Mediation to find a solution is continuing.

AIB said it was planning to contact all its Priory Hall customers, with the focus on putting families in new homes outside the estate.

Brendan O'Connor, AIB's head of financial solutions, said the bank was genuinely trying to get the crisis resolved.

"The issue for them is that they are not in a family home," he said. "For a family home, I don't think Priory Hall is an option. This is not semantics."

Mr O'Connor declined to discuss what alternatives were being looked at to take clients out of temporary council accommodation and into a home of their own.

The AIB executives were the first of the country's top bankers to face the Oireachtas Committee on Finance to discuss the financial services sector and activities within the four main lenders. Hearings run tomorrow and Thursday with Bank of Ireland, Ulster Bank and Permanent TSB.

The focus of the meetings is on meeting targets set by the Central Bank for banks to provide sustainable solutions for 20% of customers who are in mortgage arrears.

AIB claimed that 4% of its mortgage customers have decided not to repay the money, classed as strategic defaulters by the bank.

Mr Duffy went on to claim that 2,000 customers in arrears have cash deposits, possibly in accounts with other banks, big enough to clear their debts.

"If someone decides that they want to pay something else they have decided that they do not want to pay their mortgage," he said.

"I'm not here to be judge and jury of what someone decides to pay."

The AIB chiefs refused to disclose how many of the 30 former executives and board members who received lucrative pensions despite the bank's crash have offered to gift some of their retirement funds.

On the investment side of its business, Mr Duffy said AIB has found 1,000 accounts where buy-to-let investors had intended to use rental income to pay for their lending but are now using the money for other needs.

Committee chairman Ciaran Lynch criticised the bank after committee members complained that the statistics provided on arrears were unclear.

"We want to see where AIB is on the map with the 20% target, specific numbers and terms, how many people. I'm also sending a message out to the other banks watching this afternoon," the chairman said.

AIB rejected suggestions they were hiding the real figures.

Last month, the Central Bank revealed that 98,000 mortgage holders were in arrears by 90 days or more at the end of June.

AIB gave a breakdown on how it has handled the mortgage arrears crisis on its books under the new target.

:: "Permanent resolutions" agreed in 4,400 accounts, with 2,579 securing capitalisation, 1,677 having term extension, 182 voluntary sale and 17 put into a split mortgage.

:: 12,500 offers have been made to customers in relation to resolving arrears.

:: A total of 153 split mortgages have been agreed.

:: More than 5,890 legal letters have been issued to customers which warned of potential repossession if no engagement takes place.

:: One quarter of all buy-to-let mortgage holders have not made any repayments in the last six months.

AIB, which has been recapitalised with about 20 billion euro and is 99% owned by the state, revealed that it has written down 38 million euro on its mortgage book this year. The figure was 55 million euro last year.


By Ed Carty and Sarah Stack

Press Association

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