AIB says 4% of mortgages in arrears

ALLIED IRISH Banks has said that just over 4 per cent of its customers with mortgages are in arrears for more than 90 days. This compares to just over 8 per cent among all lenders, according to Central Bank figures released in September.

More recent figures from ratings agency Moody’s show that in October arrears rose above 10 per cent on about half the State’s mortgages.

AIB last week agreed a deal with Certus, the independent banking service firm, to help the Statecontrolled bank manage the growing number of customers who cannot repay mortgages.

The deal, which has yet to be signed, will be the second between a bank and Certus, which manages the run-down of the €30 billion former Bank of Scotland (Ireland) loan book for UK group Lloyds.

AIB has been using contract and agency staff to help with distressed mortgage borrowers.

The head of AIB’s home mortgage business, Jim O’Keeffe, told Newstalk radio yesterday the bank had a lower rate of arrears than many of its competitors.

“If we look at the September industry figures published at that point, there were 8.1 per cent of customers more than 90 days in arrears; AIB’s figure isn’t running at that level. Our numbers in terms of that comparison are just over 4 per cent at that point.”

AIB, which is 99.8 per cent State owned, has an Irish mortgage book of €26 billion, while its recently acquired subsidiary, the former building society EBS, brings the banking group’s mortgages to €41 billion. – (Additional reporting Bloomberg)