Just more than 80 customers each secured debt writedowns of more than €1 million from AIB in private deals agreed since 2015, the bank has disclosed to the Oireachtas finance committee.
The majority State-owned bank told the committee in written replies to questions asked but not answered at a committee hearing on March 2nd that 83 customers out of about 1,900 where more than 90 per cent their debts were written off had more than €1 million in debts forgiven.
AIB revealed in the follow-up letter to the committee that the overall value of debt written down across the 1,900 customers was €533.8 million – an average of €275,000 per customer.
These were debt write-offs agreed outside the formal bankruptcy and personal insolvency processes and made up 1 per cent of 150,000 AIB customers who had their debts restructured.
The bank had previously only disclosed the 1,900 figure to the committee in response to questions raised in the wake of the controversy around a significant debt write-off agreement reached privately between AIB and the former Kilkenny hurling star DJ Carey.
[ AIB defends debt deals following DJ Carey criticism ]
Aontú leader Peadar Tóibín TD, a member of the finance committee, said that the 83 customers who each had more than €1 million in debt written off were “very unique and significant outliers” accounting for 0.0005 per cent of the 150,000 AIB customers who had their debts rearranged.
“The question that has to be asked is what makes them unique? With a half a billion euro cost, it is important there is transparency in relation to this. This is a bank that is majority State-owned and had public interest directors,” said Mr Tóibín.
In the letter sent to the committee yesterday, the bank said that of the 1,936 customers who received writedowns since 2015, 1,359 were small- and medium-sized enterprises (SMEs), or 70 per cent of the total, and 577 were mortgage customers, making up the remaining 30 per cent.
AIB told the committee at the March 2nd hearing that the bank had written down a total of €3.5 billion between 2015 and 2022.
The bank made no comment at the hearing about Mr Carey’s debts.
The former hurler had about €7.5 million in debt written off a €9.5 million judgment secured by the bank – a writedown of about 80 per cent – after it sold properties securing the bank’s loans at the five-star golf resorts of Mount Juliet in Co Kilkenny and the K Club in Co Kildare.
[ Sale of golf properties linked to DJ Carey raised €1.8m towards his AIB debt ]
In its letter to the committee, AIB also provided more details about the 150,000 AIB customers who had debts restructured returning them to a sustainable financial position.
Almost 67,000 customers, 45 per cent of the total, had mortgages restructured and a further 50,000, some 34 per cent, had personal loans restructured. The remainder was made up of SMEs.
Among the mortgage solutions, arrears capitalisation – where some or all outstanding mortgage arrears are added to the remaining balance of the mortgage – was the most common: almost 20,000 home mortgages and 5,600 buy-to-let mortgages were restructured in this way.
The second most-common fix agreed with a customer was moving to an interest-only arrangement to reduce monthly repayments; this was applied to 8,800 home mortgages and almost 5,000 buy-to-let landlord mortgages, according to AIB’s letter to the committee.
A term extension was applied to 3,725 home mortgages and 1,397 buy-to-let mortgages.
AIB said in its letter: “Whilst the information is very sensitive, we trust this provides the committee with further assurance as to our fair and consistent approach to debt write-off.”
The bank’s managing director of retail banking, Jim O’Keeffe, told the committee at the March 2nd hearing that there were “no special deals for special individuals coming to AIB”.
AIB told the committee that any partial or full write-off of debts are agreed based on what the customer can afford and can take place after legal action is taken and secured assets are sold.