The Bank of Ireland sold € 344 million in Irish mortgages through securitization in a deal that will reduce NPLs to 5.3% of total loans.
The bank said the deal would not affect the rights of individual borrowers and that clients would not need to take any action.
Mortgages are mainly secured for owner-occupied and leased-out investment properties that were at some point in arrears.
The gross book value of the portfolio is € 344 million, indicating that the par value of the related debt is higher.
The deal will increase the regulatory capital of the Bank of Ireland, potentially helping to increase lending in the future, but will reduce the bank’s interest income by 5 million euros per year.
Changes for borrowers appear very limited. Bank of Ireland will continue to support
mortgages and related customer relationships, but the debt will be removed from the bank’s balance sheet.
Any restructuring arrangements agreed between the Bank of Ireland and the client, including any alternative settlement arrangements, will not be changed as a result of the transaction. There are no changes to the protections currently offered to clients under the statutory codes of conduct of the Central Bank of Ireland, including the Code of Conduct on Mortgage Arrears and the Consumer Protection Code.
The sale comes at a time when Bank of Ireland prepares to take over KBC Ireland’s Irish mortgage book for about € 10 billion, although in this case the Irish bank again intends to take on only current debts, so any bad loans held by KBC will be sold separately.