Mattie McGrath (Tipperary, Independent)
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167. To ask the Minister for Finance if there are proposals or plans by a bank (details supplied) to engage in the sale of its loan book to so called vulture funds; and if he will make a statement on the matter. [26713/16]

Michael Noonan (Limerick City, Fine Gael)
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As the deputy is aware, significant progress has been made across the Irish banking sector in reducing the level of non-performing loans (NPLs) since the financial crisis. This has been primarily achieved by customers engaging directly with their banks and agreeing a sustainable payment plan which allows the customer an achievable path out of arrears, as well as protecting the value of the loan for the bank. In many cases these agreements have included elements of debt restructuring and writedowns. This is the most equitable means of dealing with problem loans for both borrowers and lenders, and I would urge all those in arrears to engage constructively with their bank in order to reach an appropriate repayment arrangement. In the vast majority of cases this achieves the best outcome for all involved.

Despite the significant progress made, the levels of NPLs in the Irish banking sector remain elevated by European standards. Banks are under pressure to reduce these exposures, both from their regulator and the market.  Notwithstanding whether or not the State is a shareholder, it is the management and board of each institution that are tasked with developing and implementing a strategy to address this challenge.

In recent years banks have introduced multiple engagement channels to facilitate those customers who are reluctant to engage directly with them. Having exhausted these initiatives, if meaningful engagement is not forthcoming from particular customers the bank may be left with no option but to look at alternative solutions which could, as a last resort, include the sale of the loan.

I would note that the bank mentioned by the deputy has commented: "We keep all options under consideration. Our primary objective is to work with borrowers under stress to return their borrowings to a satisfactory position."