IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

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Supplementary information (unaudited) continuedAdditional residential mortgage information (continued)Forbearance arrangementsSupport for mortgage customers who are experiencing financial difficulties with their scheduled residential mortgage repayments isprovided by the Bank’s Arrears Support Unit. Forbearance options for customers are considered on a case-by-case basis, and areconsistent with industry guidance and practice. Forbearance measures include arrears capitalisation, interest only concession, less thaninterest only concession, greater than interest only concession and, subject to any constraints under the commitments, term extensionfor lending secured on property. In the normal course of business, a payment holiday is not offered as an option.Forbearance measures are employed in order to assist customers who are experiencing temporary repayment difficulties with theobjective of bringing the mortgage back onto sustainable terms within a reasonable timeframe. These management policies andpractices typically provide the customer with terms and conditions that are in line with their current capacity to service the loan. Loanswhere forbearance has been granted or is being considered are taken into account within the Bank’s impairment assessment process.At all times the Bank complies with the Central Bank of Ireland’s statutory codes of conduct for mortgage lenders when dealing withmortgage arrears.The information provided and the format of this information reflect the detailed requirements of the Central Bank of Ireland and areconsistent with quarterly reporting submitted to the Central Bank of Ireland by the Bank.Owner occupier mortgages 31 December 2011Loans > 90 daysAll loansin arrears and/or impairedNumber €m Number €mInterest only ('IO') 283 37 186 29Payment reduced (less than IO) 221 36 193 33Payment reduced (greater than IO) 307 29 173 19Payment moratorium 93 14 64 12Arrears capitalisation 1,565 180 904 130Term extension 366 24 253 21Hybrid 849 114 577 96Total 3,684 434 2,350 340Buy to let mortgages 31 December 2011Loans > 90 daysAll loansin arrears and/or impairedNumber €m Number €mInterest only ('IO') 145 27 115 24Payment reduced (less than IO) 33 11 31 11Payment reduced (greater than IO) 10 2 6 1Payment moratorium 13 2 10 2Arrears capitalisation 261 53 204 49Term extension 72 15 54 13Hybrid 82 20 77 18Total 616 130 497 118172
Irish Bank Resolution Corporation LimitedAnnual Report & Accounts 2011Provisions for impairment - residential mortgages6 monthsended31 December2011€mSpecific- Owner occupier 46- Buy to let 16Collective 18Total 80The total impairment charge of €80m represents 5% of the Bank's total lending impairment charge for the year and reflects the overallcredit quality of the portfolio and the continuing difficult conditions in the Irish residential property market. Of the specific residentialmortgage impairment charge, €28m relates to mortgages where forbearance has been granted.Repossessed collateralRepossession of collateral is only considered by the Bank after all other avenues of resolution have been exhausted.The below table shows the number of repossessed properties and associated loan balances on the Bank's balance sheet at year end.The loan balances associated with those repossessed properties which have not been sold are stated at the current market value ofsecurity held.Residential repossessions31 December 2011GrossNumber of BalanceRepossessions Outstanding€mOwner occupier 51 18Buy to let 81 26Total 132 44During the six months since the INBS Transfer Order on 1 July 2011, 33 properties have been repossessed. Following repossession of aproperty, the Bank implements its process for managing properties in possession which involves:- Appointing an auctioneer/agent to sell the asset;- Having the building adequately insured;- Obtaining a Building Energy Rating certificate;- Obtaining at least two quotes for all properties that require maintenance; and- Reviewing all repossessed properties on a monthly basis.In November 2011, following a competitive tender process, the Bank appointed a sole sales agent with a nationwide presence tomanage the sales process for properties in possession.Properties are disposed of as soon as practicable after repossession and the proceeds are used to reduce indebtedness. During theperiod from 1 July 2011 to 31 December 2011, 28 properties were disposed of, details of which are set out in the table below.31 December 2011Number Gross balance Grossof outstanding at sales Costs to Loss ondisposals repossession proceeds sell sale€m €m €m €mResidential mortgagesOwner occupier 15 4.1 1.6 0.1 (2.6)Buy to let 13 5.2 1.5 0.1 (3.8)Total 28 9.3 3.1 0.2 (6.4)173
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Irish Bank Resolution Corporation L
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ContentsIrish Bank Resolution Corpo
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Chairman’s statementIrish Bank Re
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Group Chief Executive’s reviewIri
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Group Chief Executive’s review co
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Business review continuedIrish Bank
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Board of DirectorsIrish Bank Resolu
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Corporate Responsibility continuedI
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Principal risks and uncertainties c
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Report of the DirectorsIrish Bank R
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Corporate governance statementIrish
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Corporate governance statement cont
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Corporate governance statement cont
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OpinionIn our opinion:• the Group
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