Over 11,000 customer accounts with Bank of Ireland remain on payment breaks

Just over 11,000 Irish customer accounts with Bank of Ireland are currently on payment breaks, as Covid-19 continues to impact economic activity.

The total value of these loans is €1.9bn.

Of these, 6,400 are mortgage accounts.

A further 2,800 belong to small and medium businesses, according to a third quarter update from the bank.

Customer accounts – that are unrelated to mortgages – make up 1,900 of the loans currently experiencing a payment break in Ireland.

The number of accounts on payment breaks here makes up 5pc of the bank’s Irish portfolio.

In the UK, where the bank also has a presence, 8,900 accounts are on a payment break, the majority of which are also mortgage accounts.

In total there are around 20,000 outstanding payment breaks in Ireland and the UK, down considerably on the 106,000 initial three-month payment breaks approved by the bank.

For those customers that have come off the breaks, the “significant majority” have resumed principal and interest repayments, Bank of Ireland said.

The number of customers requiring additional support is in-line with its expectations.

Non-performing loans (NPLs) have remained “broadly stable” since the end of June, it added.

Bank of Ireland had NPLs of €4.5bn at the end of September, equivalent to an NPL ratio of 5.8pc.

The bank said it experienced higher activity levels in the three months to September 30 when compared to prior quarter, with new lending up 59pc.

Mortgage drawdowns in Ireland increased 30pc compared to the second quarter of this year.

It also experienced improved business activity in its UK business.

However, overall new lending of €9bn to September 30, was 25pc lower compared to the prior year.

Chief executive Francesca McDonagh warned that recently announced Covid-19 restrictions by the Irish and UK governments combined with Brexit “present continued uncertainty.”

“Against this backdrop, our capital position remains strong,” she added.

The bank’s voluntary redundancy scheme, which recently concluded, will result in around 1,450 full-time employees leaving the company, starting this year and continuing over the course of 2021.

When completed the financial impact is a circa €114m reduction in annual staff costs, equivalent to 14pc of September’s annualised staff costs.

The bank is incurring a €169m restructuring charge because of the scheme.

Net interest income – a key barometer of a bank’s profitability – was 2pc lower in the nine months to September versus the prior year.

Meanwhile, business income was down 19pc over the nine months compared to the corresponding period last year.

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