From the Central Bank's commentary
Restructuring Arrangements
A total of 28,364 new restructure arrangements were agreed during the fourth quarter of the year, reflecting a 19 per cent increase on the number of new arrangements agreed during the third quarter. The data on arrears and restructures indicate that of the total stock of 136,564 PDH accounts that were in arrears at end-December, 38,416 (28.1 per cent) were classified as restructured at that time.
Of the total stock of restructured accounts at end-December, 54.3 per cent were not in arrears.
Restructured accounts in arrears include accounts that were in arrears prior to restructuring where the arrears balance has not yet been eliminated, as well as accounts that are in arrears on the current restructuring arrangement. At end-December, 79.3 per cent of restructured PDH accounts were deemed to be meeting the terms of their arrangement. This means that the borrower is, at a minimum, meeting the agreed monthly repayments according to the current restructure arrangement. It is important to note that ‘meeting the terms of the arrangement’ is not a measure of sustainability, as not all restructure types represent longer-term sustainable solutions
For instance, short-term interest only restructures are, in general, not part of longer-term sustainable solutions. However, inability to meet the terms of the arrangement implies that the restructure agreement put in place may not have been suitable. Table 1 shows the percentage of restructured accounts that were deemed to be meeting the terms of their arrangement at end-December 2013, broken down by arrangement type. Lower numbers indicate a higher incidence of ‘re-default’, and these are particularly evident amongst arrears capitalisation cases, as well as cases in which a permanent interest rate reduction has been granted. As the figures in Table 1 only reflect compliance with the terms of the current restructure arrangement, we should expect to see a higher percentage of compliance among the restructure types that are likely to be shorter-term.
Nonetheless, the figures imply that of the total stock of accounts in the arrears capitalisation category, 42.1 per cent of PDH accounts have ‘re-defaulted’, i.e. the arrears balance has increased since the arrangement was put in place.
Extract from Table 1
Percentage of
permanent restructures "meeting the terms of the Arrangement" - PDHs
Split mortgages|96.3%
Term extension|85.5%
Arrears capitalisation|57.9%
Permanent interest rate reduction|50%
Extract from Table 1
Percentage of
temporary restructures "meeting the terms of the Arrangement" - PDHs
Payment moratorium|94.4%
Interest only > 1 year|90.6%
Interest only <1 year|84.9%
Temporary interest rate reduction|89.7%
Reduced payment > interest only|84%
Deferred Interest Scheme|79.6%
Reduced payment < Interest only|68.6%
Other| 87.5%