Distressed Homeowner loans must not be sacrificed for AIB flotation

Labour spokesperson on Finance Joan Burton TD has again called on Fine Gael to postpone the imminent flotation of 25% of AIB until clarification is provided on what will happen to the billions of euro of distressed home and business loans that the bank plans to offload to make itself more attractive to investors

Deputy Burton said:

“Investors in AIB are being told to expect an increase in the number of repossessions, in a bid to entice people to buy shares, and ensure the flotation is a success.

“I am disturbed that a State owned bank would pursue such tactics.

“AIB plans to reduce its bad loan book by €6 to €7 billion which has the potential to cause huge havoc and distress for many Irish families and businesses as the bank tries to improve its attractiveness to investors.

“Efforts to place distressed mortgages into a non-profit structure that would see the loans shift to the mortgage to rent scheme within an approved housing body appear to have stalled due to EU rules.

“I am seriously concerned that AIB will pursue quick fire sales of non performing loans and it is clear that the Department of Finance and Fine Gael support this approach.

“I am calling on the new leader of Fine Gael Leo Varadkar to postpone the sale, as he himself has proposed increased investment funding in his leadership bid.

“Now is the time to seek changes to the EU investment rules, and also ensure distressed borrowers are dealt with properly and sensitively, and not in a rushed effort to improve AIB for sale.”