Debtwire NPL Chart of the Week: Majority of non-performing residential loans off Irish bank balance sheets for first time

NPL Chart of the Week: 9 July 2019

At the end of March 2019, for the first time, more Irish non-performing mortgages were held by non-bank entities than by banks, according to a Debtwire analysis of Central Bank of Ireland (CBI) data. Entities including funds and their Irish subsidiaries held residential NPLs totalling EUR 7bn compared to EUR 5.9bn still on banks’ balance sheets.

The figures have been turned upside down in the space of a year, with almost twice as many in banks, EUR 9.5bn, as in non-bank entities, EUR 4.7bn, at the end of 1Q18.

The data show how Irish banks have been tackling the volume of distressed mortgages with portfolio sales. Last year saw EUR 11bn of residential loan sales in Ireland, according to the Debtwire NPL Database.

In line with the same trend, Ulster Bank this week confirmed a plan to sell a EUR 900m portfolio of residential NPLs, as first reported by Debtwire. The report that the portfolio includes EUR 810m of owner-occupied loans has sparked fresh controversy in the Irish press.

Banks were initially hesitant to sell mortgages backed by primary dwelling homes, due to political backlash, but with several sizeable portfolio sales, the volume held by non-bank entities, EUR 4.2bn, was fast approaching that within banks, EUR 4.5bn as of the end of 1Q2019.

The total volume of owner-occupied residential NPLs is more than twice that of buy-to-lets.

The volume of buy-to let NPLs outside of banks surpassed that within them for the first time at the end of 2018. The figures now stand at EUR 2.8bn and EUR 1.5bn respectively.

Amy Finch Data Journalist Debtwire
Amy Finch Data Journalist Debtwire

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