Michael McGrath (Cork South Central, Fianna Fail)
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As Minister for Finance, I am precluded from intervening in commercial and operational decisions in any particular bank, even one in which the State has a shareholding. Decisions in this regard are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis. This independence is protected by a Relationship Framework which is a legally binding document that cannot be changed unilaterally. This framework, which is publicly available, was insisted upon by the European Commission to protect competition in the Irish market.

Not withstanding the above, officials in my department contacted AIB in relation to this matter and the bank has provided the below information:

• AIB has reduced its Non-Performing Exposure (NPE) levels from €31 billion in 2013 to €2.0bn or 3.4% of gross loans, as of September 2023. For customers in difficulty, our focus has been to put in place sustainable solutions to help them to get back on track. The Bank’s preference is to provide solutions through customer engagement on a case-by-case basis. AIB continues to support customers through a comprehensive range of forbearance solutions, and we have done so in over 150,000 cases.
• In line with regulatory requirements, European banks are obliged to classify certain loans as NPEs for a variety of reasons and it is this cohort of cases to which the question raised applies.
• They are also required to hold high and unsustainable levels of capital against NPEs. By reducing the level of NPEs it strengthens the Banks overall balance sheet, which contributes to building a more resilient and sustainable business and enhances AIB’s position to support existing and future customers, and the Irish economy.
• AIB remains committed to reaching an NPE level of c. 3% in the medium term, which is in line with European norms.
• In respect to loan sales, most of the customers included in portfolio loan sales are in substantial arrears for a protracted period of time. Performing accounts may be included in the scenario where they are cross secured with non-Performing accounts.
• Customers whose loans are included in a portfolio loan sale are afforded the same regulatory protections they had prior to the sale.
• Additionally:
• In circumstances where AIB has sought to engage with Customers over a protracted period to resolve an arrears position on their borrowings, where those efforts have been unsuccessful and where the loan is non-performing, Debt Recovery Agents are appointed by AIB to engage with these customers in arrears to seek to put in place a repayment arrangement to address their outstanding debt and arrears position.
• The types of customer debt that this approach is typically applied to relates to credit cards, personal overdrafts, hire purchase, leasing and personal & business loans.
• Debt relating to Private Dwelling House and Buy to Let mortgages are not referred by AIB to Debt Recovery Agents.
• The Debt Recovery Agents appointed by AIB are regulated by the Central Bank.