7/2/19: S&P on Irish Banks Outlook

S&P on Irish banks outlook for 2019, with my comments included: https://www.spglobal.com/marketintelligence/en/news-insights/trending/wU14cpHw2NfouDi3MnHVQw2.

20/11/15: U.S. Households' Deleveraging: Painful & Long

An interesting set of charts plotting trends in U.S. household credit arrears over time, courtesy of the @SoberLook

Three things stand out in the above. 

Per first chart, credit cards debt is the only form of credit that saw arrears drop below pre-crisis levels. It also happens to be the form of debt that is easiest to resolve - largely unsecured and easily written down. Mortgages debt arrears - while declining significantly from crisis peak - still remain at levels above pre-crisis averages. Ditto for all other forms of household debt. 

Also per first chart, improving labour markets conditions are doing zilch for student loans arrears. These remain on an upward trend and close to historical highs.

Thirdly, from the second chart, new volumes household credit in arrears in 3Q 2015 are broadly consistent with the situation in the same quarter in 2014, with new arrears falling to 4Q 2007 levels, but still running at levels well above 2003-2006 levels.

This, in an economy characterised by more robust labour markets than those of Europe and by personal insolvency regimes and debt resolution systems more benign than those in Europe. In simple terms: deleveraging out of bad debt is a painful, long-term process. Good luck to anyone thinking that raising rates will do anything but delay it even longer and make the pain of it even greater.

2/9/2014: Mortgages in Arrears Down, but Risks Rise

Much has already been highlighted in the latest mortgages arrears data from Ireland for Q2 2014. The Central Bank's full press release is available here: http://www.centralbank.ie/press-area/press-releases/Pages/ResidentialMortgageArrearsandRepossessionsQ22014.aspx

But some things are worth repeating, and a couple of things remain largely unreported. Let's focus on these.

First and foremost, all figures reported talk predominantly about PDH (principal residences) mortgages as distinct from BTL (Buy-to-Let) mortgages. This is fine, but in my view, many of these are inter-connected: same families hold both, securities are inter-linked etc. So I will cover here combined numbers of PDH and BTL loans.

1) At the aggregate level, there were 165,674 mortgages in arrears of any duration at the end of Q2 2014, down 3.44% (-5,904 accounts) on previous quarter. This is the good news. Slightly less impressive news is that the balance of these mortgages in arrears stood at EUR33.629 billion, which represents a decline of only 1.93% q/q (down EUR662.2 million). So the mortgages that remain in arrears are now of larger size on average than before. This, of course, may mean that by sheer accident, easier to repair smaller mortgages are being restructured, but it might also mean that the banks are cherry picking easier mortgages. Which is fine, in the early stages of the workout, but will also mean that things are going to get progressively tougher to resolve in the future.

2) Robust declines in arrears were recorded in mortgages at the lower duration of arrears:

• Number of mortgages in arrears up to 90 days declined 8.1% to 43,582 (a drop of 3,842 accounts) and their outstanding volume declined in line with the number of accounts - down 8.62% (ERU675.6 million)
• Number of mortgages in arrears of 91-180 days has fallen also significantly, down 7.88% (-1,378 accounts) and their values also dropped broadly in line with accounts reduction, down 8.26% or EUR266.6 million.

3) Things are a bit tighter with harder to resolve cases of longer duration arrears:

• Total number of mortgages in arrears over 180 days was down by just 0.64% q/q in Q2 2014 (-684 accounts). Note that repossessions rose by 200, so this suggests that very little restructuring of harder arrears cases is taking place. 
• Of the above, number of mortgages in arrears 181-360 days was down significantly - q/q down 9.74% or 2,421 accounts but their volume decreased somewhat less, down 8.35% or EUR397.6 million.
• Mortgages with arrears 361-720 days out have declined 3.82% (-1,269 accounts) which is far lower than declines in shorter arrears mortgages, and the volume of mortgages in arrears in this category fell only 3.02% (down EUR208.2 million) q/q.
• But the real problem is the increase in mortgages in arrears over 720 days. Despite all the ongoing efforts by the banks to dress up extend-and-pretend solutions to arrears as sustainable and long term, the number of mortgages in most severe distress rose 6.19% q/q up 3,006 accounts and the volume of these mortgages rose 7.64% or EUR884.8 million.
• As the result of the aforementioned cherry-picking by the banks, mortgages in arrears 91 days as proportion of all mortgages in arrears rose to 73.7% in Q2 2014 from 72.4% in Q1 2014 and 70.1% in Q2 2013.

4) Meanwhile, repossessions rose 11.87% q/q to 1,885 which is an increase of 200 accounts - still a far cry from what should be happening in the market and yet another data point supporting the thesis that the banks are still engaged in deploying extend-and-pretend solutions in a hope of delaying repossession to allow the price to rise. This, of course, also indicates that the banks are still unwilling to face the music and deal with the most distressed borrowers by resolving residual arrears and shortfalls prior to forced or voluntary sales.

5) Top of the line: restructured mortgages numbers rose to 125,763 accounts in total an increase of 10,284 accounts or +8.81% q/q. Of these, 76,901 accounts were not in arrears at the end of Q2 2014 a rise of 13.96% q/q or 9,418 accounts. This is good news. However, 48,862 accounts that were restructured were in arrears an increase of 1.54% q/q or 3,714 accounts.

6) As you recall, I define my own category of mortgages: those that are at risk of default or defaulting, or in simple terms, "mortgages at risk". This category includes, for obvious reasons, mortgages that are in repossession, mortgages in arrears, but also mortgages that were restructured, but are not in arrears to-date (the reason for this category inclusion is that currently 39% of all mortgages that were restructured are in arrears, despite the fact that restructuring are still relatively fresh and more accurately reflect the underlying financial conditions of the households, on average over the last 2 years, 45% of all mortgages that were restructured continued to run or slipped again into the arrears). So the 'at risk' category is where potential future risks are likely to arise. In Q2 2014 264,460 mortgages accounts in Ireland (27% of total number of accounts) were 'at risk' - an increase of 1.54% q/q or 3,714 accounts. These accounts amounted to EUR46.06 billion of debt or 34% of the total mortgages debt outstanding. The value of debt in this groups of mortgages rose 0.78% q/q or by EUR357.8 million.

This is the underlying problem we will have to continue facing over time.

8/2/2014: Irish Mortgages Crisis: More of a crisis, less of a solution

This is an unedited version of my Sunday Times column from January 19, 2014.



With Dublin property prices and rental rates on the rise optimism about bricks and mortar is gradually re-infecting our living rooms and feeding through to the government and banks' expectations concerning the mortgages arrears.

The good news is that, per latest data, there has been a decline in the arrears reported by the Department of Finance. Across the six main lenders tracked by the department, mortgages in arrears were down by 1,903 in November 2013, compared to September.

The bad news, however, is that the very same figures show that the banks continue to focus on largely cosmetic debt relief measures. In many cases such restructuring tools are potentially pushing distressed borrowers deeper into debt. The fact that Official Ireland lauds such measures as 'permanent' also indicates a lack of serious consideration of the risks faced by the distressed borrowers in the future.


Let's take a look at the latest mortgages numbers, reported by the Department of Finance. To caveat the discussion below, these numbers exclude smaller, predominantly sub-prime lenders, whose borrowers are currently nearly all in arrears.

As of November 2013, there were 116,481 principal residences mortgages accounts in arrears, comprising 17 percent of all principal residences accounts. Counting in buy-to-lets, 148,727 accounts were behind on their contractual repayments, which represents 18 percent of all mortgages. The Department does not report the amounts of mortgages or actual cumulated arrears involved, but based on the data from the Central Bank of Ireland, at the end of Q3 2013, mortgages in arrears amounted to 26 percent of all housing loans.

Of the above, 20,325 principal residences mortgages in arrears over 90 days have been restructured representing just over a quarter of all arrears in this category of mortgages. This number is only 1,812 higher than in September 2013, and is down 89 on August 2013.

We do not know what exactly happened to the mortgages that were reclassified as no longer in arrears nor restructured. The omens are not great, however. Based on the Central Bank data, around half of all previously restructured mortgages relapse into arrears. Some properties have probably gone into repossessions or were voluntarily surrendered.

This lack of clarity signals a deep state of denial by our policymakers and civil servants of the true causes and extent of the crisis. Overall, figures supplied by the Department of Finance classify mortgages into ‘permanently restructured’ and ‘temporarily restructured’. There is no methodological clarity as to what these designations mean. The data reported is not audited and the process of restructuring to-date is not being independently tested by anyone. A systematic registry of various solutions applied by the banks simply does not exist and no one can see the models used in structuring these solutions and their underlying assumptions. The fog of secrecy surrounding mortgages arrears resolution process is thick.

Everyone involved in the process of mortgages arrears resolution knows that the real problem faced by distressed borrowers is the level of debt they carry. But restructuring data reported by the Department of Finance tells us nothing about total debt levels of the households before and after restructuring. Adding insult to the injury, our data excludes unsecured debt – a major barrier to mortgages sustainability and a huge obstacle to banks offering borrowers forbearance. No secured lender can be expected to agree a debt reduction plan for a mortgage, when unsecured lenders are expecting to be made whole.

The official data also separates principal residences from buy-to-lets, despite the fact that a large number of households with arrears on the latter also face difficulties funding the former. Are risks being shifted from one side of the household balancesheet to another?

We are living through a debt crisis of historically unprecedented proportions and yet we are still refusing to threat household debt in a holistic approach. Instead, the overarching belief in the system is that once a mortgage account is restructured, the borrower is no longer at risk. To achieve such an outcome, the bank can offer a household anything between extending temporary interest-only arrangement to offering a split mortgage.  A term extension, or arrears capitalisation, or a fixed repayments scheme in excess of interest-only repayments, or a hybrid of all of the above, is all that is officially available.

The strategy for dealing with distressed borrowers, therefore, is to roll the arrears into either a top-up to the existent mortgage or set up a future claim against the property, and forget the problem ever existed. In medical terms, the analogy is to removing a person off the hospital patients’ list, once she is transferred out of the emergency.

This treatment is problematic because it assumes that the distressed borrowers who went into the arrears will be able to service their new mortgages until full repayment. It further assumes that any future shocks to household finances and to the economy can be covered under the new arrangements.

None of these assumptions have been tested by the independent analysts. All of these assumptions can raise significant questions, when one considers what sort of arrears resolution deals are being offered by the banks.

Suppose a bank makes a mistake in its risk assessment of the proposed solution and, after years of making due payments, the household slips into financial difficulties once again. There is nothing in the system to address such a risk. The household will face the cost of the new crisis, plus the residual cost of the current one, plus the loss on all payments made between now and the moment the new crisis materialises.  In contrast, the bank faces lower cost. The officials responsible for the present system face, of course, no risks at all.

How likely is the above scenario? Per official data, 60 percent of all 'permanent' restructurings involved rolling up accrued arrears and/or stretching out repayments over longer time horizon. In other words, including interest payable, the debt levels associated with such restructurings are greater than those incurred under the original mortgage. This begs a question – how will these households deal with higher future interest rates that are likely to materialise given the longer horizons and larger life-cycle debts of their restructured mortgages? Another question worth asking is how can capitalisation of arrears address the original causes of the financial distress that has led to arrears accumulation?

At most, less than one in six of all mortgages in arrears have been ‘permanently’ restructured without risking an increase in the overall life-time debt levels. Only one in twenty five of all defaulting mortgages were modified on the basis of some risk sharing between the banks and the borrowers. The vast majority of Ireland’s distressed borrowers are expected to pay the full price of their own and bank’s errors. Instead of restoring debt sustainability to Irish households’ finances, the system appears to be aiming to provide only a temporary cash-flow relief.


The key stumbling blocks to the successful resolution of mortgages arrears are, unfortunately, the cornerstones of the personal insolvency regime reforms and of policies aimed at dealing with distressed borrowers.

These include the fact that Irish homeowners are facing the full cost of dealing with the banks without any support from the state. This stands in contrast to the UK model where these costs are usually in part or fully covered by the banks. High costs and cumbersome bureaucracy deter many homeowners from engaging with the banks and from seeking professional and independent advice in restructuring their debts. So far, only one bank, the AIB Group, has voluntarily committed to helping its distressed borrowers to access independent support. The rest of the Irish banking system, including the regulators, are happy to make borrowers pay.

The pilot scheme designed by the Central Bank to deal with the problem of unsecured debt has now run its course. There is a complete silence across the official channels about its successes or failures, or about its potential renewal. Which suggests that the scheme was a flop. Meanwhile, the banks are refusing debt reductions to mortgages arrears, often citing lack of cooperation from unsecured lenders. We will never know how many of the 59,620 ‘permanently’ restructured borrowers could have availed of some debt relief but were failed by the dysfunctional system.

More ominously, we have effectively no regulation over the resolution schemes advanced by various banks. For example, through November 2013, there were 6,090 split mortgages solutions extended. Vast majority of these involve lower cost of borrowing offset by a delay in debt claim realisation. In contrast, one of the major banks currently is in the process of developing a split mortgage product that will offer borrowers an option of converting the capitalised portion of the split back into normal mortgage at some point in the future. In exchange, the borrowers will be offered a sizeable debt write-off for a portion of their mortgage.  Such a product is vastly superior to all other split mortgage arrangements in place, but it will be treated as identical to them in future reports.

The latest data on mortgage arrears resolutions clearly shows that the Irish State is unwilling to forgive those who fell into debt distress under the hardship of the Great Recession.  Instead of helping families to overcome the debt problem, our system is designed to help the debt problem to gain control over the debtor.

Box-out:

With the first issue of post-Troika Irish bonds safely away, it is time to reflect on the NTMA's opening gambit in the markets. Whatever one might say about the agency, its timing of this month's sale was impeccable. In the global markets, investment funds have been migrating out of fixed income (bond markets) and into equity markets pretty much throughout most of 2013. This trend is now accelerating. Usual bulk buyers of sovereign bonds are also starting to slow their appetite. Sovereign Wealth Funds, especially those located in Asia and the BRICS, are facing slowing domestic economic activity, reduced funding inflows from their exchequers and increased political pressures to reinvest domestically. Euro area banks, other large buyers of government bonds, are continuing to repay ECB-borrowed funds. They too are unlikely to demand significant amounts of Government bonds. And, looming on the horizon, large euro area issuers are about to swamp the market with fresh supply. Spain and Italy alone are planning to sell some EUR712 billion worth of new bonds to fund maturing debt and new deficits. All of this suggests that both supply and demand pressures later in 2014 can make it tougher for smaller euro area countries to tap the markets. Which makes NTMA's this month's timing so much wiser.

12/12/2013: Measuring the Mortgages Crisis in Ireland

As the readers of this blog would know, I rarely comment on articles in Irish press, and rarer yet on articles in the Irish Times. So here is a rare occasion, not because of the article itself, but because of what it suggests about our national treatment of statistics.

Let's start from the top. The New York Times published an article on Irish crisis today. Here's the link: http://www.nytimes.com/2013/12/12/business/international/as-bailout-chapter-closes-hardships-linger-for-irish.html?pagewanted=2&_r=1&rref=business&hpw&pagewanted=all

Irish Times - in some ways correctly took the New York Times article to task: http://www.irishtimes.com/news/ireland/irish-news/are-we-really-reduced-to-shooting-pigeons-for-food-1.1625588

Let me take up one point in the two articles. Original version of the NYT article cited - quoting from the IT response - that "most startling is the assertion that two-thirds of homeowners have not paid their mortgage “on time for the last two years”".

IT correctly points that this is not true, saying that "The bank’s most recent arrears figures suggest 18.5 per cent of mortgage holders are in arrears of some sort or other.
They also indicate that 22 per cent of those currently in arrears are behind in their payments for at least two years or more."

The NYT published correction to their original claim. Story ends there.

But from the point of view of reality, it does not. This is pivotal to our narrative about the crisis.

Mortgages arrears have many meanings in the economy. But in the social context and in relation to mapping out the extent of the crisis here's what matters: Mortgages arrears are a signifier of the extent of the crisis. In this, they are neither the only indictor, nor are they a relative indicator. Let me explain.

1. Assume we want to identify the extent of the crisis as it impacted the households holdings of property.
2. Assume we have official data to do so only.

From (1) and (2), identifying the crisis extent is simple and yet hard. 

Take an analogy of identifying the crisis in the macroeconomy. That would be GDP. Or rather, the size of the crisis = the gap between the GDP at pre-crisis peak to GDP at crisis-period trough. One thing that does not matter to this analysis is where the GDP is today (post-trough). Should in the future the GDP hit a new trough and should the drivers for this be consistent with the drivers for the original crisis, then that new trough becomes the crisis metric. Should GDP recover to pre-crisis highs (as it will one day), the magnitude of the crisis will not be zero, it will still be GDP pre-crisis less GDP at trough.

Variants on the above are possible by looking at various GDP metrics and/or pre-crisis and trough metrics (trend, potential etc). But the essence of analysis is the same: GDP pre-crisis - GDP at trough = Crisis Impact.

Now, back to the original issue: How shall be measure the impact of the crisis when it comes to mortgages?

The IT comments can suggest (and usually the media obliges to take this as given) that Arrears Current = Crisis Impact. But are they?

My view is that they are not. Let's compute the total impact:

1. Peak of arrears (we are yet to reach that) = part of impact
2. Restructured mortgages that are not in arrears = part of impact for two reasons: (a) they face high probability of going back into arrears (just under 50:50 chance currently and declining slowly); and (b) restructured mortgages are no longer the original pre-crisis mortgages, so the mere fact of restructuring them is a sign of the crisis impact
3. Repossessed homes = direct impact; and
4. Voluntary surrenders = direct impact.

What do we know from official sources: Total mortgages outstanding: 915,746 per CBofI (composed of 768,136 principal residences-linked mortgages and 147,610 BTLs), of these:

1. Total mortgages in arrears: 181,946 per CBofI (composed of 141,520 principle residences and 40,426 BTLs)
2. Restructured, not in arrears: 56,186 (composed of 43,034 principal residences and 13,152 BTLs)
3. Repossessed homes - we have no numbers for aggregates repossessed - neither the CBofI, nor Department of Finance report these on any regular basis. But in Q3 2013 we had 1,566 properties in repossession (1,050 residences and 516 BTLs). These are properties held in possession by the banks. We do not know how many they have sold since the beginning of the crisis.
4. Voluntary surrenders - we have no data on these from any official source, but the properties that are surrendered and are still in the possession of the banks are aggregated into (3) above.

So, with incomplete information on (3) and (4), to-date, the extent of the crisis is for all types of properties:

181,946 in arrears + 56,186 restructured, not in arrears + 1,566 repossessed and surrendered = 239,698 accounts or, ca 26% of all accounts outstanding.

And the number is growing...

This is not 2/3rds as claimed originally in the NYT, not even 1/3rd, and it is certainly not the percentage of mortgages in trouble over 2 years... and the above 26% include BTLs too... But the true extent of the crisis is that 26 out of 100 mortgages in the country have been directly impacted by it. And the crisis has not peaked, yet.

But here's what this tells us about our psychology when it comes to measuring the extent of the crisis: we commonly interpret arrears alone (and often only arrears in excess of 90 days) as the metric of the crisis. This is an error - an error based on the implicit anchoring of the idea of the crisis to the news and thus, to relative position in time. This is simply wrong. The crisis of WW2 is measured by the absolute level of destruction wrecked at the peak, cumulatively, not by where the losses were in 1955 or in 1948.


Actually, should you be interested, I track the evolution of the above metric (I call it mortgages in default, defaulted or at risk of default) in my regular posts on CBofI quarterly data. The latest was provided here: http://trueeconomics.blogspot.ie/2013/11/28112013-irish-mortgages-arrears-q3-2013.html.

And for the conclusion: I recall in 2007 CEO of AIB at the time stating in a meeting with analysts that "Irish people do not default on mortgages. They never do." I replied: "Never is a very precise term. Is there any uncertainty around this claim?" and he retorted: "None." Back to that 26% figure, then?..

4/12/2013: IMHO launches a new service for distressed borrowers

Irish Mortgage Holders Organisation (IMHO: https://www.mortgageholders.ie/) have launched a new initiative today designed to provide free bankruptcy service for distressed borrowers.

Here are the details:

Contact details: via email info@mortgageholders.ie or Arthur Mullan, IMHO: 01-871 9411

29/11/2013: Central Bank: Failure of Own Sustainability Criteria on Mortgages Arrears Resolutions?

So things are getting better with mortgages arrears crisis… practically easing the worries of the nation, according to the Irish media and officialdom… And the Central Bank is delighted that the banks are so actively meeting targets etc… (Note: my coverage of the arrears figures is here: http://trueeconomics.blogspot.ie/2013/11/28112013-irish-mortgages-arrears-q3-2013.html)

Except…

Per Central Bank: “We expect that lenders will continue to progress and develop their approaches to ensure that future sustainability targets will be achieved.  With indications the banks are now offering long term sustainable solutions to customers, the Central Bank continues to encourage meaningful engagement between lenders and borrowers.”

And what these 'sustainable solutions' might be, you should ask?

Per CB: "As at end of September 2013 the lenders in total reported they had issued proposals to 43% of mortgage accounts in arrears against a target of 30%."

Now, let me be forthright here on my views:
1) Repossessions and voluntary surrenders are a part of the solutions tool kit and are unavoidable (and indeed optimal) in a number of cases.
2) However, the above can only be deemed sustainable if and only if they take place in the context of first (ex-ante repossession or surrender) concluding arrangements between borrower and lender on what is to be done with the residual balance on mortgage remaining at the end of the property sale.

Since we do not know what percentage of all repossessions and surrenders were accompanied by such an agreement, we do not know if there is ANY (repeat - any) sustainability of debt has been achieved in the process of such a resolution. In other words, the Central Bank cannot make a factual claim that 55% of the resolution measures proposed were sustainable (aka meet the CB own criteria for them satisfying the target requirement).

Worse, the massive number - 55% - is itself an indication that the entire Central Bank-led process is a complete failure. In fairness to the Central Bank, the language of the release (http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankpublishesoutcomeofMortgageArrears.aspx) suggests that the bank is not entirely happy with the status quo distribution:

"There has been a change in the trend of proposed solutions from Quarter 2 to Quarter 3. In Quarter 2 62% of the proposals were in the Surrender/Repossession category, which decreased to 55% in Quarter 3."

But there are problems even with this claim. Firstly, there is no trend. There is not enough time series data to show ANY (repeat - any) trend up or down in the data. What we have is one quarter against another. Should the 'trend' of 7 percentage points per quarter continue, we will end 2014 with over 40% 'resolutions' leading to foreclosures or surrenders of properties. Given the bank wants to deliver 75% resolutions target by the end of 2014, this would imply that more than 40% of the mortgages accounts in arrears will be in liquidation. That is a trend to a national disaster.

28/11/2013: Irish Mortgages Arrears: Q3 2013

Numbers are out for Residential Mortgages Arrears in Q3 2013 and the data shows that the chronic problem of mortgages distress is still with us with little change after months of tough talks from the authorities, 'resolute' actions from the banks and a barrage of legislative, regulatory and rhetorical changes.

Top of the line numbers are still frightening, albeit things have largely faltered out on most fronts.

• Total number of PDH accounts at risk or defaulted (defined as all accounts currently in arrears, restructured and not in arrears, and in repossessions) at the end of Q3 2013 stood at 185,604, down 329 accounts or 0.2% from Q3 2012. 
• Over the 12 months through September 2013, number of BTL accounts at risk or in default rose 3,022 (+5.9%) to 54,094. 
• Thus, total number of mortgages accounts currently at risk or defaulted at the end of Q3 2013 stood at 239,698, which is 1.1% higher than in Q3 2012. 
• Total outstanding volume of mortgages at risk or defaulted for both BTL and PDH mortgages at the end of Q3 2013 was EUR46.77 billion, up EUR1.75 billion on year ago.
• As of the end of Q3 2013, 20.3% of all PDH mortgages accounts and 36.65% of all BTL mortgages accounts were either in arrears, restructured due to previous arrears or in repossession. 
• Across the entire system, 26.18% of all mortgages accounts and 33.6% of all mortgages volumes outstanding in Ireland were at risk or defaulted at the end of September 2013.

Deleveraging process is not working either:

• Total outstanding volume of mortgages debt in the country was EUR138.88 billion in Q3 2013, only 2.4% lower than a year ago.
• Total number of mortgages accounts fell to 915,746 in Q3 2013, down 3.08% y/y.
• Residential mortgages in arrears rose to 141,520 accounts (+0.1% y/y) and BTLs accounts in arrears numbered 40,426 (+10.35% y/y). Thus total number of accounts in arrears was up 2.2% y/y.
• Total outstanding volumes of mortgages in arrears stood at EUR36.56 billion in Q3 2013, up 5.8% y/y (comprising EUR25.56bn in residential mortgages volumes +4.75% y/y and EUR11.0bn of BTLs +8.32% y/y).
• Total amounts of actual arrears rose to EUR3.479bn in Q3 2013, up 28.2% y/y.
• Repossessions rose to 1,566 in Q3 2013 from 1,503 in Q2 2013 and 1,358 in Q3 2012. Residential repossessions rose to 1,050 from 1,001 a quarter ago and 944 a year ago. The process of repossessions remains very slow and is likely to accelerate in the near future.

These figures clearly show that banks-driven approach to the process of resolving the mortgages arrears crisis, adopted by the Government and the financial sector regulatory authorities is not delivering. To-date, the speed of mortgages arrears restructuring and resolution is disappointingly slow.

Some charts to illustrate the trends: