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Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: The Deputy has two minutes left.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Before Mr. Duffy replies, I am getting reports that there is a lot of background noise coming up, including phone noise in particular. I must ask members to turn off their phones. If they are using iPads, they should take them off a cellular signal because it is creating a lot of noise.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: No, you will not because I got the distortion as well. I call Mr. Duffy.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: To date, how many personal insolvency arrangements have been put in place with borrowers of AIB?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Is dealing with unsecured creditors a barrier to reaching solutions in this area?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Without citing institutions, could Mr. O'Connor give us some examples of the modelling of that problem?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Yes, and I am coming to that in my next question.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Mr. Duffy said a high percentage of these unsecured loans are between banks and not with credit unions or other institutions. They are held by the banks. Do we have a situation therefore where a bank at one side of the table tries to put a PIA in place, but a bank on the other side does not assist in that because of the unsecured aspect of the debt? And does the same happen at times where...

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: One of the things that needs to be said is that AIB has been very innovative and has acted commendably since we met with it last. It has introduced some very helpful measures for its distressed customers. One of the issues I broached previously, and it arises in discussion this afternoon, concerns the sustainability level being 20% above the insolvency guidelines. Bearing in mind...

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Looking to the future, when I hear people talk about recovery in the property market, it frightens the life out of me. What we all want to see is a normalisation of the market. What I mean by this is that we want to see prudential lending practices that ensure we do not see a property bubble, massive house price inflation and that we see a realistic level of affordability in the property...

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: One final issue, the standard LTV applied is 92%. Now that we are seeing reactivation of the residential property market, have AIB staff in the sales division targets to achieve each year?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: One concern that has been brought to my attention relates to the difficulty for people in coming up with a deposit at this time. There is massive price inflation in the rental sector and that is probably distorting the market. Rents are so far in excess of property values currently. This is creating a difficulty for people who wish to purchase and there is pent up demand in the area....

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Is it possible to re-evaluate on a 92% LTV?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: I thank Mr. Duffy for being so categorical on that.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: The last time that Allied Irish Banks and all the banks appeared before the committee, there was an issue of contention as to how the target figure was reached because it involved a number of letters going out. As we have moved on from that, the question is how many people are in resolutions. The issue of consistency in resolutions is confused with similarity and the idea that people get...

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: I understand.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Following on from what Deputy Michael McGrath said, a case in point might be that the setting of the variable interest rate by AIB - certainly, that is the political comment - might be more responsive in this bank than in the other banks. Is that the case?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: In fairness to Mr. Duffy, every time he has come before the committee he has acknowledged the support of Irish taxpayers and set out the goal of re-establishing Allied Irish Bank as a profitable investable bank in the optimum way to return the State's investment over time. Does Allied Irish Bank have in its projected plans a time by which the State will no longer be an owner of AIB?

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: So in layman's terms, although it is not written in stone, there is an expectation or some movement towards having AIB in the market as a sellable institution, or to be prepared as a sellable institution, by this time next year.

Joint Oireachtas Committee on Finance, Public Expenditure and Reform: Mortgage Arrears Resolution Process: (Resumed) Permanent TSB and AIB (9 Apr 2014)

Ciarán Lynch: Would that be a percentage sale or a sale in its entirety?