Mr. Stephen Bell:

No. We tried not to consider legal action as an offer, as such. It is more a consequence of a failure to take advantage of an offer. It is absolutely not in our interest or our preference to go down the repossession route. When we appeared before this committee previously we said that the mortgage arrears target regime had some extraordinarily swingeing penalties for banks that did not meet them. As a consequence of that, it was always going to be inevitable that banks would do those things that allowed them to hit the targets. The only incontrovertible way of hitting the targets in that early stage was by taking legal action because everything was subject to subsequent review by the Central Bank and its auditors.

We commenced legal action in about 4,300 cases beyond the threatening letter. That number has not changed since we last appeared before this committee. We have increased by over 60% the number of long-term arrangements we have put in place with our customers. We have now narrowed down to around 2,300 those customers that still are not in some kind of arrangement or meaningfully engaging with us. We think that is making reasonable progress. Alongside that we have taken 2,500 families out of serious arrears.

This is going to be a longer process because we effectively had a two-year hiatus where we could not do anything very much. That was because under the CCMA, contact was restricted and under the Dunne ruling the threat of consequences had disappeared. In a multi-debt environment, which is what Mr. Brown referred to as part of his opening remarks, this is not purely a mortgage issue - this is a personal indebtedness issue. When credit card lenders, credit unions and unsecured lenders can continue to pressure customers to pay, but mortgage lenders cannot, it does create an uneven playing field. I am afraid this is an element of catch-up as we try to get back to a normal position.