As you will be aware as part of the Central Bank's Financial Measures Programme the three PLAR banks are required to deleverage €70bn of assets by 31 December 2013. Of this they are required to actively dispose of €34bn of assets. IBRC is subject to an EC Restructuring Plan which requires it to work out its balance sheet over time, including where possible via disposal of loan books. To this end, Non-core teams have been established by each of the banks to focus on managing sales processes. In most instances the Banks have also employed expert professional sales advisors to assist in ensuring that the sales process undertaken maximises sales proceeds. Deleveraging committees are also in place at each bank. These are attended by executive and non-executive Directors, with representatives from the Central Bank and the Department of Finance, who attend as observers.
To date significant progress has been made. Total deleveraging achieved across government supported banks was €46bn as at 31 December 2011. Deleveraging has been achieved within planned assumed discounts. From a capital perspective, the loss incurred on the divestment of these assets is broadly offset by a reduction in the level of risk weighted assets.
It is normal course of practice that sales processes are conducted under appropriate confidentiality constraints, including for example non-disclosure agreements to protect price sensitive information, the disclosure of which could prevent the banks from maximising proceeds on sale. In this regard, it would not be advantageous to disclose the exact details of the remaining non-core books that are targeted for disposal or details of the sales and marketing activities given the dissipation in value that could occur. At certain points the banks will publish deleveraging plan updates as part of their investor and stakeholder relations activities.
