ANALYSIS:YESTERDAY'S RESULTS from the EBS offer a damning indictment of how the building society got its strategy so wrong. But despite this, EBS is still one of the busiest players in the much-subdued financial services market.

According to managing director Fergus Murphy, the EBS brand remains in “good fettle” with savers, and the building society, which is paying interest at above the market rate, attracted 20 per cent of all new savings in the market last year. It reported total inflows of some €532 million and, while this is down on the €700 million reported for 2009, it now has a total share of 10 per cent of the national savings book, up from 9 per cent in 2009.

Although national mortgage volumes declined by 41 per cent in 2010, EBS, as one of the few institutions which was actually lending, saw its share of new mortgages grow from 7 per cent in 2009 to 24.1 per cent.

However, its volume of residential loans in arrears continues to rise, albeit at a slower pace than in 2009. Over 8 per cent of its residential loans are now categorised as non-performing, with expectations that this will rise further in 2011 due to the impact of rising interest rates and a higher tax burden.

On the issue of debt forgiveness, embattled mortgage holders who are struggling to meet repayments were given a glimmer of hope when Murphy said the building society would consider writing off individual mortgage holders’ debts on a “case-by-case” basis.

EBS also suggested that while negative equity mortgages, whereby borrowers are allowed to sell their properties and carry their debt with them to a new property and mortgage, are not currently allowed under the rules that govern building societies, it may consider them once it is licensed as a bank under the new AIB structure.