Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. It is important to say to the House that we want to complete the repair of the banking system and ensure banks are there to support the wider public interest, which is the whole purpose of a functioning banking system within an economy, as set out in the programme for Government. Dealing with non-performing loans is one of the key priorities of the European regulator, the Single Supervisory Mechanism, SSM. While great progress has been made in the Irish banks, the SSM has made it clear that further reductions need to be made. At 28%, as of last June, Permanent TSB's non-performing loan ratio was one of the highest in the eurozone. Given the volume of borrowers who have not engaged with the bank in recent years and the number of cases where treatments were not possible or have failed, the bank has said that achieving an acceptable non-performing loan ratio will not be possible without some form of loan sales. Under the terms of the relationship framework with the bank, loan sales do not require the Minister for Finance's consent. However, the bank will be required to consult with the Minister and will do so in due course. In any loan sale, it is important to highlight that the contractual terms of borrowers, or indeed tenants, remain in place after the loan sale while the Central Bank code of conduct for mortgage arrears still applies. In other words, mortgage holders have the same rights regardless of who owns the loan book. While loan sales are regrettable, the Minister for Finance is conscious of the need for the bank to continue on a path of recovery.

The Government was briefed on this by the Minister for Finance on Tuesday at its last meeting. On the Deputy's question about other banks, Ulster Bank had a loan sale last year or 18 months ago. Of course people are concerned about who will be managing their loans and who they will be talking to or negotiating with in terms of debt. We are very conscious of that. We are also conscious of the rules that apply and there is a significant onus on the Central Bank to make sure that when loans are sold, the contractual rights of those who are linked to those loans continue to apply and we will do that.

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