# Central Bank study: The drivers of NPL resolution from 2012 to 2017



## Brendan Burgess (8 Sep 2018)

A new report from the Central Bank 



_[broken link removed]_, by Fergal McCann and Niall McGeever, examines the balance of NPLs in the Irish retail banking system, which stood at around €25bn in 2017, down from €85bn in 2013. The research considers the main driver of NPL reductions in different lending segments from 2012 to 2017. 


The key findings of the Financial Stability Note are:



Loan cure – the return of previously defaulted loan balances to performing loan status – is the key driver of NPL reduction in the residential mortgage market. This is particularly true for principal dwelling home (PDH) mortgages, where loan restructuring has played a pivotal role. This reflects the importance of the Mortgage Arrears Resolution Process (MARP) framework developed by the Central Bank of Ireland to support homeowners in arrears.
In contrast, loan exit – through liquidations, write-offs and sales – accounts for the large majority of NPL reduction in the commercial real estate (CRE) market.
Buy-to-let mortgage resolution shares some of the characteristics of PDH mortgages and CRE loans. Exit plays a relatively more important role for BTLs than for PDH mortgages, while cure plays a greater role for BTLs than it does for CRE loans.


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## newtothis (8 Sep 2018)

Brendan Burgess said:


> This reflects the importance of the Mortgage Arrears Resolution Process (MARP) framework developed by the Central Bank of Ireland to support homeowners in arrears.



Now there's a shock, a Central Bank report that lauds the Central Bank's MARP! 

Joking apart, for all its faults (and there are many), it has been absolutely invaluable in trying to deal with the banks.


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