Mr. Richie Boucher:

There were a couple of other questions. Reference was made to Professor Morgan Kelly and defaulted loans. As I touched on in the earlier part of my presentation, as part of the troika review and following the troika’s exit from Ireland there was an asset quality review of the banks. It was a very forensic study of the credit profiles of the banks. There were significant reviews of individual SME files, corporate files, business banking and mortgage files. We reflected that at the year end. I am sorry if I do not have the customer numbers for the absolute level of defaulted loans but I have the volumes. At 30 June 2013 the number of SME – to be consistent we use the EU definition of the term “SME” - defaulted loans was €2.9 billion. Those defaulted loans had reduced to €2.7 billion by December. That reflected in part restructures but in part customers that had been restructured moving to cure. I advised the stock market when we gave an update on our results that the number of customers defaulting had reduced and I referred to the number of curing customers. The cures we set out in our accounts so the restructures that we have available to customers is that we have restructured SME loans of €1.487 billion at the end of December 2013; €679 million of the restructure was term extensions; €116 million was adjustments or non-enforcement of covenants; €278 million was reduced payment with full interest; €277 million was reduced payment greater than full interest; arrears capitalisation was €36 million and the balance was a range of other solutions.

My colleague, Mr. McLoughlin, mentioned that there were certain targets set by the Central Bank of Ireland. We met those targets. The targets are reviewed by the Central Bank. It sends in people to review how we have achieved them and we were able to again update the market on a verified numbers basis that nine out of ten of the challenged customers at the end of December 2012 had been in an agreed condition at the end of December 2013. The nine out of ten has since moved to around about 95%. Obviously, we will have some customers who will move into a default and we have to work with those customers but the most important thing was to look at what was the position at the end of December 2012 and where those customers were at the end of December 2013. I have tried to give some colour of what the restructures look like.

We also clearly do have some customers who have moved into a default position where they have gone into examination, receivership or otherwise. In the vast majority of those cases the business has survived. The ownership has changed but employment has been preserved to some extent as someone else has come on board in the business. What we are seeing is quite a lot of opportunity in the marketplace at the moment. As confidence starts to slowly come back, people who perceive themselves as natural consolidators are starting to roll out. People might have survived and now they see opportunities to buy a premises up the road or buy out a competitor. The first signs we saw of that are in the area of car dealerships. We are seeing it also in pub chains and hotel chains. As that natural consolidation takes place we are helping and supporting those customers.