Ms Jane Howard:

There is not a specific target set by the European Central Bank but it is clear that any bank with NPLs in excess of a 5% level is regarded as having a high number of NPLs. The banks are expected to have a plan to reduce those towards the European average. We have seen that European average reduce more recently to between 3% and 3.4%. That is sound risk management for any bank. Although we do not have a specific target, we absolutely understand our commitment to reduce our level of NPLs.

As the Deputy notes, we have made progress. The last time representatives of the bank were before the committee, the level was approximately 17% and it is currently 10.3%. It is important that I highlight our first priority, which is to help customers with a non-performing loan - a mortgage - to get into a long-term and sustainable solution.

Accordingly, we have always contacted customers who are in arrears.

We have also committed additional resources to ensure that we can contact all of our customers who are in a non-performing status so that they can engage with us and we can help as many of them as possible. We have employed additional resources because the economy is stronger, unemployment is at a lower rate of just under 5%, many of our customers who are in a non-performing status have higher available incomes and house prices have increased significantly. Against that background, we have found that when customers fully engage with us, which includes completing a standard financial statement, we can offer a long-term solution to four out of five customers that keeps them in their homes. Sadly, we cannot find a long-term solution for one in five customers who engage with us that keeps them in their homes. It is almost an impossible situation. In such circumstances, we work with the customers on an individual basis and examine other options. These might include mortgage-to-rent or a voluntary surrender.

Our priority is to help customers, but we need to reduce our number of NPLs. While there is no target, there is an expectation that we reduce them. We believe that is right.