Belfast Telegraph

Ulster Bank warning customers of plans to sell problem debts

By Donal O'Donovan

Ulster Bank has written to some small business and farming customers in Northern Ireland giving them just weeks to refinance problem debts or risk their loans being sold off by the bank.

The borrowers are among a number understood to all be behind on payments or otherwise in breach of their original loan terms, and therefore are being managed by Ulster's specialist loan arrears unit.

The customers include farms and small and medium enterprises (SME) on both sides of the border.

While the bank wouldn't say how many customers are affected in total, it's understood the majority are in the Republic.

The bank has now written to the affected customers warning them that their loans may be bundled up and then put on the market for sale.

Mortgages are not affected, and neither are business borrowers that are fully up to date with their loans, a spokeswoman for the bank said.

So-called vulture funds, mainly based in the US, have become large scale buyers of Irish loans in recent years.

"Ulster Bank is in contact with a number of business customers, who are outside current arrangements or in arrears and under special management in our problem debt management unit, to discuss the potential inclusion of their debt in a future Ulster Bank loan disposal process together with their options for repaying or refinancing their debt in advance of any such process," a spokeswoman for the bank said.

"They are not mainstream customers, they are in our problem debt management unit and this action is part of the bank's strategy to manage non-performing loans," she said.

The time frame means borrowers, especially those in arrears, will struggle to refinance their loans with another bank or repay the debt before the March 30 deadline.

The bank won't be ready to fire the starting gun on a sale process immediately.

Ulster Bank has sold off masses of problem loans over the past 12 months in particular.

Belfast Telegraph