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Noonan ups pressure on banks on arrears

Monday, March 11 12:03:38

Finance Minister Michael Noonan today increased the pressure on banks to step up their efforts on mortgage arrears.

He said the Government is insisting the banks do more about the levels of mortgage arrears.

The Minister said the issue has gone on for far too long and the Government is disappointed that tackling the problem has not happened sooner.

Speaking in Limerick, Mr Noonan said the banks now had the statistics, the menu of solutions and the properly trained staff to deal with the issue.

Banks will be set quarterly targets for restructuring distressed mortgages under a new plan set to be unveiled this week by the government and central bank, a senior government minister said yesterday.

Ireland's mostly state-owned banks have booked big losses on bloated commercial property books after the financial crisis. But they have struggled to get to grips with mortgage arrears, viewed by the central bank as the country's biggest domestic policy issue.

"The government is likely to publish a mortgage plan in the coming days that will set out targets for banks," communications minister Pat Rabbitte told RTE.

"Banks have been dragging their heels, there is absolutely no doubt about that but now the mortgage plan will require them on a quarterly basis to deal with a certain proportion of the mortgages in trouble irrespective of what that category is."

The proportion of mortgages in arrears for more than 90 days rose to 11.9 percent in the fourth quarter of last year but grew at the slowest rate since statistics began to be collected three years ago, the central bank said on Thursday.

The Sunday Business Post, quoting government sources, said domestic lenders would have to make extra provisions if they did not meet the restructuring target under the new plan but would be also offered incentives if they achieved the required numbers.