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A deal on the Anglo promissory note could also see mortgage debt moved to IBRC, Michael Noonan has said. Laura Hutton/Photocall Ireland

Troika deal could move tracker mortgages to IBRC - Noonan

The minister for finance tells RTÉ that loss-making mortgages could be taken off the books of AIB and Permanent TSB,

A DEAL ON restructuring the promissory notes could lead to restructuring Ireland’s banking sector and moving some mortgages to the former Anglo Irish Bank, Michael Noonan has revealed.

Noonan last night revealed that the talks on restructuring the €31 billion of promissory notes for Anglo – upon which the first €3.1 billion repayment falls due in three weeks – were also discussing other moves to boost the Irish banking sector.

In particular, authorities are now discussing the possibility that non-performing tracker mortgages could be taken off the books of Permanent TSB and AIB – the two lenders which are almost totally State-owned – and transferred to the Irish Bank Resolution Corporation, formerly Anglo.

“They [the Troika authorities] see other benefits apart from the sustainability of the debt,” Noonan said, noting that “having a final restructuring of some of the elements of the bank would give us a much stronger banking system.”

This would mean that impaired home loans would be taken on directly by a dedicated bank which is already managing a struggling loan book, while meaning that the books of AIB and PTSB would have less impaired assets.

This, in turn, could mean the State could find it easier to sell off its stake in those institutions at a later time. Bank of Ireland, in which the government is a minority stakeholder, could also participate in the scheme.

Speaking on RTÉ’s The Week in Politics, Noonan also confirmed that the ongoing discussions about the Anglo promissory notes were focussing on extending the period over which Ireland could repay the €31 billion notes, with a lower interest rate.

This would mean that although Ireland would still have an ongoing liability on repaying the notes, the annual repayments – of €3.1 billion, set to continue every March from this year until 2027 – could be reduced significantly.

This, in turn, would mean the Irish government would be forced to make slightly more modest budget corrections and lessen the burden of austerity being passed onto the public.

Read: ‘No deadline’ for deal on promissory notes – Gilmore

More: ECB chief: Governors did not discuss deal on Anglo promissory notes

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