ULSTER BANK and First Active will wait at least six months before foreclosing on customers experiencing difficulties in meeting mortgage repayments.
A spokeswoman for the banks said they would follow a similar measure undertaken by their parent company, Royal Bank of Scotland, and apply a six-month moratorium on all customers, including those who have already fallen behind on payments.
The moratorium emerged as credit rating agency Moody's reported a moderate rise in delinquencies on Irish mortgages packaged and sold on to investors as asset-backed securities.
The agency said there had been no repossessions or losses on any prime mortgage securities, while there had been a minor loss in one "non-conforming" transaction.
In another development, Deutsche Bank briefed a group of pension fund trustees and advisers from the Irish Association of Pension Funds (IAPF) about the benefits of participating in the recapitalisation of the banks at a meeting in a Dublin hotel yesterday.
The bank has been retained by an investment group composed primarily of existing shareholders in the Irish banks to represent their interests against US private equity firms which are in talks about investing in one or more banks.
Deutsche Bank told the meeting that the group aimed to assess "whether an opportunity exists for domestic and international investors to participate in any potentially attractive recapitalisation investment opportunity".
The Deutsche team, headed by Irishman Tadhg Flood, told the IAPF meeting that the group intended to secure a "seat at the table" for any talks on the recapitalisation of the Irish banks and to protect existing shareholders from having their rights "pre-empted".
The group, which includes AIB Investment Managers, Irish Life Investment Managers and Bank of Ireland Asset Management, would "provide a mechanism for institutional capital to be proactive".
Deutsche said private equity firms earned annual returns of between 25 per cent and 80 per cent on their investments in distressed Japanese and US banks in the past, and private equity firms were attracted to the Irish banks because their share prices valued them at one-fifth of their book worth, making them the most discounted bank stocks in Europe.
Anglo Irish Bank - which publishes its results today for the year to September 30th, 2008 - raised €1.5 billion in funding through the sale of Government-insured bonds, due for redemption in September 2010 before the State bank guarantee expires. The sale was oversubscribed but attracted less interest from investors than the debt issuances by AIB and Bank of Ireland over the past fortnight.
The money came from 60 investors in 18 countries and was priced at 80 basis points over midswaps rate, the benchmark cost of selling bonds. This compares with 65 basis point over midswap rates paid by Bank of Ireland for €2 billion raised in bond sales last week.
Irish Nationwide Building Society raised £325 million (€381 million) last Friday selling Government-backed bonds, mostly to Irish investors, priced at 70 basis points over mid-swaps rate.
