Michael McGrath (Cork South Central, Fianna Fail)
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115. To ask the Minister for Finance the details of the proposed loan portfolio sale by a bank (details supplied); the nature of the loans concerned; the number and book value of the loans; and if he will make a statement on the matter. [8017/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware non-performing loans (NPL's) remain at an elevated level across the European banking system and addressing this issue is one of the key priorities for the Single Supervisory Mechanism (SSM). In Ireland significant progress has been made across the banking sector in reducing the level of NPLs since the financial crisis. Despite this progress, the level of NPLs in the Irish banking sector remains well above the European average.

Hence the SSM has tasked the management and board of each institution with developing and implementing a strategy to address this challenge. In recent years banks have introduced multiple engagement channels to facilitate customers, including those who are reluctant to engage directly with them. Having exhausted these initiatives, if meaningful engagement is not forthcoming from customers or where affordability does not exist or cannot be established. the bank may be left with no option but to look at alternative solutions. These could, as a last resort, include the sale of the loan.

The Deputy will be further aware that I have no role in the day-to-day commercial and operational decisions of any of the banks' in which the State has a shareholding. Under the Relationship Framework Agreements (RFA) the disposal of loans is a commercial decision for the management and Board of each individual institution.

I have received the following response from the bank:

"For commercial reasons the bank is unable to outline any details in relation to specific loan sales at this stage.

AIB has reduced its impaired loans to c. €7.3bn from a peak of c. €29bn over the past three years. During this period some impaired portfolios were sold and case by case restructurings continued.

The reduction was achieved primarily by working through loans on a case by case basis. AIB remains focused on reducing impaired loans to a level more in line with normalised European peer levels and will continue to implement sustainable solutions for customers who engage with the bank where feasible. The bank has c.1,500 people continuing to work in this area and they are supporting and finding solutions for customers.

AIB continues to review all options in relation to reducing impaired loans including further sales".

Michael McGrath (Cork South Central, Fianna Fail)
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116. To ask the Minister for Finance the progress a bank (detail supplied) has made in selling non-performing loans; the number and names of the bundles of loans set to be sold; the type of loans contained within each bundle; the value of each bundle; and if he will make a statement on the matter. [8045/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I can confirm for the Deputy that I have been informed of permanent tsb’s decision to launch a sale process involving a portfolio of non-performing loans. This transaction was confirmed publicly by the bank earlier this week and has been dubbed Project Glas. This decision is being taken to help reduce the bank’s high level of non-performing loans and is a move prompted by SSM regulatory requirements.

As I cannot interfere in the day to day operations of the bank nor the interaction with its regulator, these are decisions for the management and board of the bank and do not require my consent. Should the portfolio sale process reach an advanced stage, and if it is of a material scale, I would expect to be formally consulted under the bank’s Relationship Framework.

I understand that the vast majority of the loans for sale are in deep arrears including many that have not engaged with the bank in recent years. However as the proposed transaction is commercially sensitive, and I must respect stock exchange Market Abuse regulations, it would not be appropriate for me to provide any further commentary on the matter at this point.

While loan disposals are regrettable, as Minister for Finance I am conscious of the need for the bank to continue on its path to recovery. Permanent tsb is a very important part of the Irish banking sector and hence the economy, with over 1 million customers, €21bn of mortgage loans  (gross) and €17bn of customer deposits. The bank also employs c. 2,500 staff.