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Third payment break is not on the table, says Bank of Ireland

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Bank of Ireland group chief executive Francesca McDonagh

Bank of Ireland group chief executive Francesca McDonagh

Bank of Ireland group chief executive Francesca McDonagh

Bank of Ireland Group says it is not considering a third payment break to customers in the Republic of Ireland whose incomes have been hit by the Covid-19 outbreak, chief executive Francesca McDonagh has said.

The bank along with other lenders have agreed to allow borrowers to take a break from repaying mortgages, business loans and other facilities as a temporary measure to ride out the current crisis.

In the Republic, the initial three month break is being extended to last six months on total. However, a further extension is not currently being considered, Mrs McDonagh revealed, as the group announced an interim management statement yesterday.

Borrowers unable to meet repayments even after the 24 week break would likely require more intensive debt solutions.

For customers in Northern Ireland, Bank of Ireland is following UK regulatory guidelines by offering payment breaks of up to three months.

Bank of Ireland said it has yet to see a spike in bad loans as a result of the Covid 19 economic lockdown, but management have made a provision for loan impairments to rise this year.

That was a major factor in the bank reporting an underlying loss of €235m for its operations in the Republic for the first three months of this year.

Towards the end of the three months the bank experienced the initial affect of Covid-19, with adverse movements on valuations and other items of €155m and impairment charges of €266m.

The group warned that Covid-19 would have a "material impact on 2020 results".

As well as a risk of more bad loans it said new lending could plunge as much as 50% to 70% from last year, including a sharp drop in mortgage lending.

Business income is expected to be 30% to 40% lower due to reduced economic activity.

Belfast Telegraph