Out of state, out of mind

Out of state, out of mind
Francesca McDonagh, chief executive, Bank of Ireland Picture: Fergal Phillips

A decade on from the start of the financial crash, bad loans still clog the system. Pressure from the regulators for banks to get rid of them at speed is increasing - but is this not just outsourcing the problem?

Bank of Ireland chief executive Francesca McDonagh was brutally honest last Monday outlining why the bank was reversing course on a longstanding policy of dealing internally with troubled home loans that were deep in arrears. The bank had doggedly stuck to its mantra that it could work through its arrears in its own way. Its figures have backed that up. Its restructuring data shows few customers defaulting once they have signed a restructuring agreement.

“We...

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