BoI's approach to arrears compred to AIB and ptsb

Some interesting insights from BoI's appearance before the Oireachtas Finance Committee


[Deputy Arthur Spring:

] Why has Bank of Ireland taken a different approach from the other banking institutions? Are the bank's fiduciary responsibilities the reason for this difference? Are its shareholders satisfied with the manner in which it is pursuing debtors?
Mr. Richie Boucher: We take our responsibility seriously. Notwithstanding different views about the issue, we have repaid all the State aid, as has been confirmed by the European Commission. The taxpayers are in profit in respect of their investment.
Bank of Ireland has two State owned competitors. Whatever definition one uses for repayment, these banks still owe taxpayers €24 billion. Slide 35, which refers specifically to mortgages, shows that AIB's defaulted loans amount to €5.5 billion, while those of Permanent TSB amount to €4.7 billion. Bank of Ireland's defaulted loans amount to €1.9 billion and our arrears are half of the industry average. Our restructures stick for longer and we have more resolutions in place on our book, relatively speaking. That is the context in which one must look at Bank of Ireland.
Deputy Arthur Spring:

Bank of Ireland has more customers put to the cosh than any other bank. That is the fundamental issue I am raising.
Mr. Richie Boucher: I do not believe the figures bear out the Deputy's statement. Allied Irish Banks has defaulted loans of €5.5 billion.
Deputy Arthur Spring:

Yes, but it is dealing with them in a way that allows people to move on with their lives subsequently.
Mr. Richie Boucher: It is a use of taxpayers' money, which is a different statement for me.
Deputy Arthur Spring:

We are in this together, not as institutions.
Mr. Richie Boucher: Our view is that taxpayers' money should be returned and they should decide themselves what they want to do with it.

From Page 20

Senator Thomas Byrne:

Deputy Lucinda Creighton referred to the arrangement AIB-EBS had with the Irish Mortgage Holders Organisation. Has Bank of Ireland considered a similar arrangement? Would Mr. Boucher see advantages from the bank's point of view in drawing up a similar formal arrangement with an advocacy group that could work at arm's length from the bank on behalf of customers? Obviously, it would have advantages from the customer's point of view.
Mr. Richie Boucher: In effect, a third party contractor is providing services for AIB. We use third party contractors in a range of our businesses. Given that AIB has €5.4 billion in defaulted loans, I can understand it needs help. It is getting help, which is an issue for it.
Senator Thomas Byrne:

Does Mr. Boucher think the bank is being help by-----
Mr. Richie Boucher: Clearly. If the Senator had €5.4 billion in defaulted loans, he would be looking for help from wherever he could find it. From our point of view, we have made a great deal of progress and continue to look to approve. The primary engagement has to be with the bank. There should be transparency where taxpayers' money is being spent.
Senator Thomas Byrne:

What does Mr. Boucher mean by "transparency" in this context?
Mr. Richie Boucher: A third party contractor is dealing with taxpayers' money. AIB has €20 billion that was invested by the taxpayer. Some third party contractor is deciding who is granted a mortgage or a write-off and who does not.
Senator Thomas Byrne:

Obviously, Mr. Boucher has concerns about that arrangement. Is that the case?
Mr. Richie Boucher: I am just noting the fact.
Senator Thomas Byrne:

Mr. Boucher does not see Bank of Ireland using "a third party contractor," as he has described the organisation, to help people.
Mr. Richie Boucher: We use third party contractors in different areas. Our mortgage book has continued to improve. Our defaults have continued to come down and we can restructure. We can offer a restructure to 90% of customers who provide us with a standard financial statement. Different banks are in different positions in the marketplace.
Mr. Liam McLoughlin: We have 790 staff looking to support our mortgage arrears book. We have 250 branches across the country. Mortgage advisers are professionally trained to support people in mortgage arrears and financial difficulty by offering them sustainable solutions. We have over 50 network account managers working with customers face to face. This ensures customers have someone to work with when they complete their standard financial statements.
Senator Thomas Byrne:

They are working for the bank which, as we keep being reminded, is a public limited company.
Mr. Liam McLoughlin: Yes.
Senator Thomas Byrne:

That is fair enough. Is there a role for some other organisation to be contracted in, independently of the bank, to advise people separately?
Mr. Liam McLoughlin: What we have done in that case is-----
Mr. Richie Boucher: I am not sure about that. I really cannot comment on a relationship to which we are a party. I cannot comment on the nature of that relationship, the role, the level of transparency or what happens.

Brendan Burgess said:

Deputy Arthur Spring:

We are in this together, not as institutions.

Click to expand...

We are only 'in this together' because a decision was made by certain politicians at the time to guarantee the banks with the peoples money without getting the permission of the people.

To quote Adam Smith on what happens when you look after other peoples money (in the case of AIB & PTSB, taxpayers' money) rather than your own...
"….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company"