Bank of Ireland sold 344 million euros of Irish mortgages via a securitization as part of a deal that will reduce its bad debt stock to 5.3% of total loans.
The bank said the deal would not affect the rights of individual borrowers and customers would not need to take any action.
Mortgages are primarily secured on owner-occupied and rental investment properties that have been past due at any given time.
The portfolio has a gross book value of € 344 million, which would indicate that the nominal value of the debts concerned is higher.
The deal will increase the Bank of Ireland’s regulatory capital, which will potentially help boost future lending, but reduce the bank’s interest income by € 5 million per year.
The changes for borrowers are expected to be very limited. Bank of Ireland will continue to maintain
mortgages and related customer relationships, but the debt will be taken off the bank’s balance sheet.
Any restructuring agreement between Bank of Ireland and a customer, including any other repayment agreement, will not be affected by the transaction. There are no changes to the protections currently afforded to clients under the statutory codes of conduct of the Central Bank of Ireland, including the Code of Conduct on Mortgage Arrears and the Consumer Code.
The sale comes as Bank of Ireland prepares to take over KBC Ireland’s approximately € 10 billion Irish mortgage portfolio.