Wednesday, September 04, 2013

Doherty and Twomey welcome AIB commitment to step up mortgage writedowns

Fine Gael TDs and members of the Oireachtas Finance Committee, Regina Doherty and Liam Twomey, have welcomed a commitment from AIB CEO, David Duffy, that the bank will write down hundreds of millions of euro in distressed mortgages over the coming 12 months. The Deputies were speaking after Mr Duffy appeared before a meeting of the Finance Committee earlier today.

Speaking after the meeting, Deputy Doherty said: ‘A new broom sweeps clean, and today I was encouraged by the approach being taken by the new management team in place at AIB, in relation to the mortgage crisis. We have all been frustrated by the heel dragging by the banks in dealing with unsustainable mortgages. But if we can believe even half of what Mr Duffy had to say today it seems AIB is finally facing up to its responsibilities’.

“According to Mr Duffy, AIB has €3 billion in its provisional fund for mortgage write-downs. A fund of this scale has the potential to make a significant difference to AIB’s thousands of customers who are struggling with their mortgages. The bank says that residual debt will be written off after voluntary sales, and that it is committed to coming to debt compromises. This is essential if long-term sustainable solutions are to be found for distressed mortgage holders.

“David Duffy made some big promises at today’s meeting of the Finance Committee; he and the bank must live up to these commitments for the sake of struggling mortgage holders, and the wider economy.”

Deputy Twomey said: ‘The AIB Chief has said that the bank intends to write off hundreds of millions of euro in distressed home loans in the coming year. This is in stark contrast to the €38 million which the bank has written off this year to date. Clearly the process must be accelerated. The frustration felt by the public on this issue is palpable. It is about time that AIB is finally stepping up its response to the mortgage crisis. This is due in no small part to the new targets on restructuring mortgages being imposed on the banks by the Central Bank’.

“David Duffy today outlined how the bank has changed its internal practices to ensure it is dealing with distressed mortgage cases faster. I look forward to questioning the chiefs of the other main banks in the coming days to examine the approach to the mortgage crisis that is being taken by the entire sector.”

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