Mr. David Duffy:

I think the philosophy we adopted at AIB in respect of any compromise on debt was again around the simple principle of affordability. We started out with two principles. If we wanted to keep people in homes wherever possible and if we wanted to protect SME jobs, what would the best approach be? We didn't necessarily take the view that someone would have to stay in their home. It may be a suitable home. We took the view that SMEs should be protected only when the business was viable and then when we applied those principles and looked at the financial aspects of each of the cases, we took the view that if it was clear that the debt was simply unaffordable, there are many extremes. You can have an SME that had a property investment strategy on multiple buy-to-lets in concert with two other businesses or individuals in a small town where the income ratio would imply that to recover the debt might take something in the order of 50 to 100 years, depending on your assumptions.

If there were extreme cases where you could not see any circumstance of repayment, we thought that on balance it was better to be realistic about that debt structure and to put ourselves in a position where the SME could return to supporting its business and its employment that it had originally started out with, and that would be constructive and positive for the economy. Secondly we would be, in the case of an individual and the home and looking at exactly the same situation, there are many examples of cases where it was more attractive for the individual and for the bank, for the individual to remain in the home. If I may give you an example. If an individual had purchased a house, as was in one case for €400,000, and if you were to evict the individual in the house - on sale in the market at the time was valued at €100,000 - and at the same time you could agree with the individual on €200,000 or €250,000 as an affordable long-term debt repayment, then you would maybe compromise on the residual debt but at the same time the individual remains in their home. They are functioning in the economy and they are repaying far more for the shareholder than would have been obtained by a simple repossession and eviction. It was that thinking that we constructed around all of those. They were very exceptional and treated all individually, very consistently.