The AIB Group is selling a non-performing loan portfolio to Everyday, as part of a consortium arrangement with Everyday and affiliates of Cerberus Capital.
At the end of March, the loan portfolio had a gross balance sheet value of €1.1bn, which represented risk weighted assets of €0.8bn, a spokesperson for AIB said. In the year to December 2017, this loan portfolio incurred a loss of €1.1m.
The portfolio being sold is underpinned by investment asset properties and excludes private dwelling
houses and family farm homes. Consisting of 800 customer connections, the average balance per customer connection is €1.4m.
An AIB spokesperson told the Irish Farmers Journal that farm assets are in the portfolio but are limited.
AIB has reduced its non-performing exposure (NPE) from €31bn in 2013 to €9.2bn at 31 March 2018.
“Ninety-five per cent of the reduction in NPEs has been achieved through case-by-case restructuring and working with customers to right-size sustainable debt based on customer affordability,” AIB said. “To date, we have implemented over 90,000 solutions including over 40,000 private dwelling houses (PDH) solutions which involved significant debt write-off.”
The buyer, Everyday Finance DAC, is regulated by Central Bank of Ireland.
AIB is expected to contact affected borrowers to inform them that their loans are being transferred, and to confirm existing legal and regulatory protections remain in place.
IFA president Joe Healy said he is concerned that some investment loans secured against farmland may be included in the loan sale.
AIB advised the IFA at a meeting last week that most farm borrowers in financial difficulty have engaged and have had loans restructured. AIB also said it will not include restructured loans that are performing to agreed terms in any future potential loan sales.
AIB assured the IFA that it will continue to implement sustainable solutions for customers in financial difficulty where they engage with the bank.
Farmers experiencing difficulties with AIB or any other bank can contact the IFA Debt Support Service in confidence on 1890 924 853.
"We don't want to lose our livelihood" - family farm at risk