Written answers

Thursday, 8 March 2018

Department of Finance

Banking Sector Data

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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39. To ask the Minister for Finance the number and value of completed loan sales here in 2017 from Irish regulated banks; the number and value of ongoing loan sales here currently from Irish regulated banks; and if he will make a statement on the matter. [10890/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The information the Deputy requested is not held by my Department and so I referred the question to the Central Bank of Ireland, as the body responsible for regulating the banks.

I have been advised by the Central Bank of Ireland that under Section 33AK of the Central Bank Act 1942, the Central Bank is not in a position to provide any specific information in this regard. 

However, some of the information sought is publically available from other sources.  For example, Deloitte’s fifth edition of the Deleveraging Europe series examines the European loans market, providing an up-to date overview of the latest transactions at H1 2017 which can be found

.

In addition, further information published by KPMG in respect of European debt sales can be found at

https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2016/09/european-debt-sales.pdf and

.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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40. To ask the Minister for Finance the number of Irish regulated banks that have adopted IFRS 9 before the 2018 deadline; his views on the impact its adoption will have on the loan book of Irish regulated banks; his further views on whether it will likely lead to a greater number of loans being classified as non-performing by Irish regulated banks; and if he will make a statement on the matter. [10948/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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IFRS 9 introduces a new regime for impairment provisioning and imposes an Expected Credit Loss approach to provisioning as opposed to the incurred loss approach that was required by IAS 39.

IFRS 9 does not change in any way the definition of Non-Performing Loans (NPLs) introduced by the European Banking Authority (EBA) and as a result should not impact the quantum of NPLs. 

IFRS 9 is applicable for accounting periods starting on or after 1 January 2018 for all listed credit institutions.  I am informed that the Irish listed banks - AIB, Bank of Ireland and Permanent TSB - have adopted IFRS 9 on 1 January 2018 for their 2018 accounting year. I further understand that they will provide information on the impacts in their annual accounts for 2017 as they are released. 

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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41. To ask the Minister for Finance if the European Central Bank or the European Banking Authority has guidance on the sale of non-performing loans to third party vendors; if he has brought the issue of the sale of non-performing loans to unregulated private equity funds to the attention of the ECB or the EBA; and if he will make a statement on the matter. [10949/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The European Council Action Plan published in July 2017 invited the European Commission to develop by summer 2018, a European approach to foster the development of secondary markets for NPLs, in particular to remove impediments to the transfer of NPLs by banks to non-banks and to their ownership by non-banks, while safeguarding consumers' rights, as well as to simplify and potentially harmonise the licensing requirements for third-party loan servicers and to take legislative initiative in this respect, as appropriate. 

I am expecting a legislative proposal from the European Commission in March 2018 which will include a proposal for licensing requirements for third-party credit servicers across the European Union.

Officials from my department have been active contributors to the discussions on NPLs, including on credit servicers, through its involvement in the European Council’s Financial Services Committee subgroup on NPLs and the more recent European Commission Expert Group on NPLs. The ECB and EBA were involved in both of these groups.

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