COVID-19: Range Of Banking Measures Announced Due To The Pandemic

• Published date: 06 May 2020
• Author: Mr Conor Keaveny and Shona Hughes
• Subject Matter: Finance and Banking, Coronavirus (COVID-19), Charges, Mortgages, Indemnities, Financial Services, Government Measures, Financing
• Law Firm: Dillon Eustace

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Introduction

Ireland's five retail banks (AIB, Bank of Ireland, Permanent TSB, KBC and Ulster Bank), together the Banking and Payments Federation Ireland ("BPFI"), the representative body for the banking and payments industry, the Irish Government and the Central Bank of Ireland ("CBI") have recently announced a series of measures as part of a coordinated approach to assist businesses and personal customers impacted by the COVID-19 pandemic. In this article, we examine those measures and other key actions being implemented by the EU, the CBI and other market participants with a view to assisting businesses and individuals who are experiencing financial difficulties during the pandemic.

Support for borrowers

The range of measures agreed between the Irish retail banks and the Government are as follows:

1. Three month payment moratorium - banks, credit unions, retail credit and credit servicing firms will introduce three-month payment breaks on mortgages, personal loans and business loans for business and personal customers who are experiencing financial difficulties caused by COVID-19. This will be subject to ongoing reviews reflecting changing circumstances and the scale and extent of the situation. Customers seeking to avail of this support should contact their respective banks as early as possible, and the banks are working to achieve a straightforward application process to assist in this regard.

2. Support for buy-to-let customers with affected tenants - flexible repayment arrangements will be made available to buy-to-let customers with tenants affected by COVID-19, including a mortgage payment break of up to three months, which will allow landlords to afford a due level of forbearance to their tenants.

3. Deferral of court proceedings - legal proceedings including repossessions will be deferred for three months. At the time of writing, it is unclear whether this applies to the issuing of new proceedings and/or refraining from progressing or staying existing proceedings.

4. Extensive supports for SME customers - the banks are working to ensure that a wide range of measures are made available to businesses who are trying to manage the financial pressures arising from COVID-19. The measures include the provision of cash flow and credit facilities as well as supply chain supports. The deferral of loan repayments for...