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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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