The covered institutions have provided me with the following information:
AIB
All relevant disclosures in relation to AIB’s mortgage portfolios, including arrears data and tracker mortgages, for December 2012 are made on page 88 to 111 of AIB’s 2012 Annual Accounts published on 27th March 2013. AIB currently exceeds the minimum regulatory capital requirements of 10.5% as set out by the Central Bank of Ireland. The objectives of AIB’s Capital Management Policy (which is subject to supervisory review and evaluation) are to ensure that it has sufficient capital to cover the current and future risks inherent in its business and to support its future development. AIB’s core tier 1 ratio remains robust at 15.1% at December 2012 and its total capital ratio was 17.6%.
BOI
Bank of Ireland's annual report for the year to 31 December 2012 gives comprehensive disclosures on its Residential Irish Mortgage Portfolios (particularly pages 321 - 333), its accounting policies (particularly pages 148 - 169), its credit risk management and asset quality (particularly pages 55 - 77) and capital position (particularly pages 26 - 28 and 96 -97).
PTSB
The value of loans greater than 90 days in arrears is disclosed on page 17 of Permanent TSBs 2012 Annual Report. For Republic of Ireland Residential that figure was €5.5bn. Of the €24.6bn Republic of Ireland Residential loans disclosed on page 17 approximately 66% were contractually linked to the ECB base rate. The Group is adequately capitalised with a Core Tier 1 ratio of 18.0% at December 2012 to cover all losses anticipated on all its loan books; however, it continues to:
- Work to find suitable long term treatments for its customers in arrears.
- Drive down its cost of funding so that the tracker mortgages are less of a drag on overall financial performance and so that it can profitably extend new credit into the economy.
- Find savings and efficiencies in all aspects of its operations.
I have also been informed by the Central Bank that the Covered Banks are required to maintain minimum capital requirements for all material risks (including credit risk) under the Capital Requirements Directive. In addition the banks subject to PCAR are required to maintain Core Tier 1 capital above 10.5%. These banks were also stress tested in 2011 under PCAR as part of the FMP in order to withstand losses in their loan portfolios (including mortgages) under an assumed adverse scenario.
