Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he will provide details separately in respect of each covered institution of the sale of any part of their mortgage book for each of the years 2010, 2011 and 2012; the implications of these sales; if there are any consequence for the individual bank customers concerned; and if he will make a statement on the matter. [4724/13]

Michael Noonan (Limerick City, Fine Gael)
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The sale of loan portfolios is a commercial matter for the management and the Board of the Institutions. I have a limited role in this function.

Allied Irish Banks (AIB) informs me that it has sold mortgage portfolios as part of its continuing strategy to meet non-core deleveraging targets set out by the Central Bank of Ireland as part of PLAR 2011 and to assist with viability enhancing measures. Similarly, Bank of Ireland (BOI) has sold loan books in the United Kingdom as part of its non-core deleveraging plan. Neither Permanent TSB (PTSB) nor IBRC have sold mortgage loan books in 2010, 2011 or 2012, however, PTSB have recently sold the rights to a small number of mortgage loan agreements as part of a larger transaction.

Any relevant disclosures in respect of these portfolio sales are made in the Annual Financial Reports or via stock exchange announcements. In the case of any transactions where the sale of mortgages occurs, affected borrowers will continue to remain liable for the full amount of their debt. The loan terms and conditions of borrowers whose loans form part of any sale remain unchanged and are not impacted by the transfer of their loans.

Deleveraging of the Banking system has progressed well. Deleveraging of €54.9bn has been achieved by AIB, BOI and PTSB from 31 December 2010 to 30 November 2012. The sales prices on portfolio sales may not in all cases have been disclosed by the banks due to commercial sensitivities and confidentiality of information. AIB and BOI where disposals have been concentrated have disclosed that overall cumulative discounts incurred have been within PCAR assumed discounts. From a capital perspective, the loss incurred on the divestment of these assets is broadly offset by a reduction in the level of risk weighted assets.

The on-going progress in deleveraging and deposit gathering activities has seen BOI make further progress towards improving its Loan to Deposit (LDR) ratio, reducing from 136% at June 2012 to less than 130% in November 2012. Similarly, AIB’s LDR reduced to less than 120% at the end of October (including loans held for sale) from 125% at end of June.