Ulster Bank has confirmed that it is to sell 6,500 mortgages in arrears, almost half of which are owner-occupier loans.

On average the loans are more than three years in arrears.

The bank is beginning talks with potential purchasers and has appointed financial advisers to manage the sale of the loans.

Ulster Bank is expecting to sell the loans within seven months.

Customers affected will not be told their loans are sold until the bank finds a buyer.

The face value of the loans is €1.6 billion. Ulster Bank has set aside €119m for the loss it will incur on the sale of the loans. 

In a statement, the bank said: "This difficult decision comes a decade after the financial crisis began and the continued forbearance cannot be maintained.

"Not all mortgages are sustainable and we are obliged to reduce the level of non-performing loans. 

"For mortgages that are not sustainable, additional forbearance will not bring them back to a performing position."

It is going to sell 3,600 owner occupier mortgages and 2,900 buy-to-let loans.

Almost three quarters of the owner occupier loans entered arrears between seven and nine years ago.

The average level of arrears is €52,000 and the face value of the owner occupier mortgages is €900m.

Among the buy-to-let loans the average level of arrears is €31,000 and the mortgages are valued at €700m.