* Home loan arrears 12.9 pct in third quarter from 12.7 pct
* Early arrears of less than three months fall 6 pct
* Employment, housing data show problems easing
By Padraic Halpin
DUBLIN, Nov 28 The number of Irish mortgages in
arrears for over 90 days rose at a slower pace in the third
quarter and fewer borrowers fell into early stage arrears in a
tentative sign that the home loan crisis may be stabilising.
Households' bad debts are a major impediment to Ireland's
hopes of economic recovery as it comes out of an international
bailout next month, deterring spending and raising questions
over whether banks will need more capital.
It was Ireland's spectacular property boom, financed eagerly
by banks, that drove Ireland to seek international help in late
At the end of this September, almost one in five home loans,
worth 25 billion euros ($34 billion), were still not being fully
repaid with 12.9 percent in arrears for more than 90 days, up a
touch from 12.7 percent at end-June and 12.3 percent in the
But the number of residential accounts in early arrears of
less than three months declined by 6 percent, the central bank
said, meaning the total number of home loans in arrears fell to
141,520 from 142,892 three months earlier.
"I don't think you can call (the figures) encouraging,
sheerly by the scale of the problem, but it can be now said that
the improving economy, particularly in the labour market, looks
to be putting a lid on the deterioration," said Dermot O'Leary,
chief economist at Goodbody stockbrokers.
"The problem now is the stock of distressed loans rather
than the flow of mortgages going into distress but obviously
there is a large stock that financial institutions will have to
work through and restructure."
Data earlier this week showed that unemployment fell at its
fastest pace in four years in the third quarter, to 12.8
percent, while separate figures showed annual house price growth
hit a six-year high of 6.1 percent in October.
However retail sales fell by 0.9 percent in October from a
year earlier, figures from the Central Statistics Office showed
on Thursday, suggesting consumers are still constrained.
Home loans in arrears of over 720 days now constitute 23 per
cent of all accounts in difficulty, the central bank data shows.
A further 11 billion euros of investment property loans are
also in distress with the proportion of buy-to-let mortgages in
arrears for more than 90 days now standing at 21.2 percent
compared to 20.4 percent at the end of June.
The central bank has increased pressure on lenders,
requiring banks to conclude sustainable agreements with 15
percent of customers in arrears over 90 days by the end of this
year, rising to 25 percent by next March. It said 23,776 new
restructurings were agreed during the quarter.
Allied Irish Banks also said recently that the pace
of new impairments in its mortgage book slowed in the third
quarter while Bank of Ireland said total arrears had
stabilised and the level of early arrears was declining.