Mr. Shane O'Sullivan:

Yes. To answer the Chairman’s earlier question, before legal proceedings as we define them, there can be letters sent by the bank that suggest that if the account is not kept up to date or if the customer is non-co-operating, legal proceedings may commence. Those letters are not included in our count.

Members are familiar with the subjectivity around the methodology set out by the Central Bank. We have chosen to only count legal proceedings from the point that a solicitor is appointed. What that means is that the customer is non-engaging and we are looking for the court to make an objective review as to how things might develop. That might result in repossession for the bank or it may typically result in a stay for the customer or clearly a subjective view made by the court as it is entitled to do.

That is our submission to the Central Bank at the end of June based on the stock of arrears customers at the end of March. I would like to draw the attention of members to the second slide. This is how we report arrears and categorise arrears at Permanent TSB which is slightly different to the methodology set out by the Central Bank. If members bear with me I hope I will give them an insight into slide No. 2. Essentially, slide No. 2 shows that to the half year, June 2013, we had offered 11,000 short-term treatments to customers, 5,000 long-term treatments, 1,000 assisted voluntary sales and we had introduced a new option to which I will refer more later on slide No. 3, namely, the arrears repayment plan. These numbers, even though they are at the same date as the Central Bank, differ for the reason I set out. We have a different methodology at Permanent TSB to the methodology set out by the Central Bank. I will explain why.

With short-term treatments, we believe there is validity in offering a short-term treatment and that can ensure sustainability over the long term. Equally, there have been a large number of customers at our bank and other banks who have been on short-term treatments for numerous years and continuing the short-term treatment may not be a sustainable answer. There may be a long-term treatment that would work better for those customers. We chose to take a prudent approach in our submission to the Central Bank and we counted only 1,500 of the 11,000 we actually had granted in the half year to June 2013. We feel that was a prudent thing to do.

There is a second factor at play, the Central Bank figures relate to arrears greater than 90 days only, whereas we look at it more holistically. There are clearly customers who are in arrears of between one to 90 days and there are customers who have had moratoriums for a number of years that deserve to be evaluated to see if we can identify a long-term treatment for those customers. Those two factors explain the difference between the first slide and the second slide. For us what is important is what we are doing for our entire customer base for customers who are struggling and in arrears.