Banking Operations

Dáil Éireann Debate, Tuesday - 23 October 2012

Tuesday, 23 October 2012

Questions (155)

Gerry Adams

Question:

155. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 51 of 23 of May 2012, if he will confirm if any of the State owned financial institutions have developed support units for small and medium enterprises borrowers in arrears similar to the support units for mortgage arrears; if he will confirm if any of the State owned financial institutions intend to outsource these services similar to a company's (details supplied) contract with AIB for its residential mortgages; if he will confirm if AIB, Permanent TSB or IBRC have similar rules for the outsourcing or contracting of services as National Assets Management Agency where competitors in the same fields are given a share of the different servicing requirements rather than business being given exclusively to one or two firms; and if he will make a statement on the matter. [45956/12]

Written answers

Minister for Finance

The covered institutions have supplied the following information regarding their dealings with their SME borrowers:

Permanent TSB:

As stated in PQ 41543/12 Permanent TSB does not have a significant amount of business loans and therefore the setting up of a support unit for small and medium enterprises borrowers in arrears is not relevant for that institution.

I am informed by Permanent TSB that it does not have in place such rules as outlined in your question in relation to the third party administration (outsourcing) of loan books. However Permanent TSB has confirmed that it will review the particular circumstances of each of the loan books to be outsourced including the size of the loan book, asset types and asset quality in order to determine whether it would be suitable to outsource to one or more parties.

AIB:

AIB has informed me that its decision to create the Financial Solutions Group ensures that specialised AIB staff are assigned to the management of distressed borrowers, inclusive of SME's. No decision has been made by AIB at this point in time to outsource any of the SME portfolio. All options to facilitate the early management of the distressed SME portfolio will be considered.

AIB are considering all options that will facilitate the early management of its loan in arrears. All decisions in relation to outsourcing are required to go through an appropriate approval process and are subject to compliance with a full procurement and tendering process.

IBRC :

I have been advised that IBRC’s SME borrowers are managed as part of the Bank’s normal business process. IBRC considers it prudent at present to continue managing this activity in-house however IBRC have informed me that it will consider its options in this regard should an opportunity arise in the future to further the Bank’s ultimate goal of maximising returns for the Irish taxpayer. Any future decisions to outsource such services would be governed by IBRC’s Group Procurement Policy to ensure a cost-effective, transparent and efficient procurement process.