Bank of Ireland disposes of Irish and UK NPE portfolios

The Group has reached agreement to dispose of Irish and UK NPE portfolios, through two separate transactions. On completion, the transactions will result in a pro-forma reduction in the Group’s 30 June 2022 NPE ratio from 5.4% to c.3.7% and a modest positive impact (c.5bps) on the Group’s CET1 ratio. The gross interest income on the portfolios was c.€30 million on an annualised basis.

UK Mortgage NPEs

The Group has reached agreement to dispose (by way of securitisation) a portfolio of non-performing UK mortgages (with a gross carrying value of c.€0.6 billion), secured on owner occupied and buy-to-let investment properties. The transaction is expected to complete on 15 November 2022, subject to customary closing conditions.

The mortgages and related customer relationships that form part of the securitisation will continue to be serviced by the Group, however the assets will be derecognised from the Group’s balance sheet.

Irish Mortgage and non-Mortgage NPEs

The Group has also reached agreement to dispose of an Irish non-performing loan portfolio with a gross carrying value of c.€0.8 billion (comprising primarily of Private Dwelling House (PDH) and Buy to let (BTL) NPEs, together with a smaller portfolio of non-mortgage NPEs) in a transaction financed by funds managed by AB CarVal. The transaction is expected to complete later in 2022, subject to customary closing conditions.

The Group will be appointed as interim servicer for a period prior to legal title transfer and credit servicing migration. Post migration, Mars Capital Finance Ireland DAC (“Mars”) will manage the loans as Legal Title Holder. Mars is regulated by the Central Bank of Ireland. Customers will continue to have the same legal and regulatory protections (for example under the Consumer Protection Code (CPC) and the Code of Conduct on Mortgage Arrears (CCMA)) after the sale.

Additional information for customers

Customers do not need to take any action arising from this announcement. There is no change to the protections currently afforded to customers and all statutory codes of conduct relevant to these customer loans will continue to apply. Prior to the transfer of credit servicing, Bank of Ireland will contact the customers whose loan(s) is/are included in the sale, to inform them that their loan(s) is/are being transferred.