A senior AIB executive has told an Oireachtas committee that the bank does not do special debt cancellation deals for special individuals.
The bank also told the committee that since 2015 around 1,900 AIB customers who have experienced difficulties repaying their loans have had them reduced by over 90% as part of final debt settlements.
The lender said this represents just over 1% of the roughly 150,000 customers who have been helped by its debt support unit to return to a sustainable financial position following a period where they faced challenges in meeting agreed loan repayment terms.
The 1,900 customers whose debts were written down by over 90% do not include those who went through a bankruptcy or insolvency process, it added.
The bank disclosed the information to members of the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, where it was appearing to discuss AIB's debt write down policy.
In his opening statement, the bank's managing director of retail banking, Jim O'Keeffe, said it has been aware of the recent commentary about its approach to supporting customers in difficulty and the policies underpinning this.
"Unfortunately, many aspects of this commentary have been incomplete and have not presented the full picture," he said.
"We have maintained our position that we are not enabled or entitled to discuss the details of any particular account regardless of the historic or current relationship with the customer involved."
"However, we have also reaffirmed that the bank has a proven track record in supporting customers in difficulty and, as a regulated entity, has a robust governance and policy framework in place that deals in a consistent and equitable manner with customers whose accounts become challenged."
Mr O'Keeffe said that framework gives priority to the restoration of customers to a sustainable relationship with the bank on a consensual basis.
The bank added that in the minority of cases where customers decline to engage with it or via third party resolution mechanisms, the same framework directs how it seeks to recover its interests in the most appropriate manner.
This can include legal action or a final debt settlement which may involve a possible write-off of debt and in such cases, Mr O'Keeffe said, it applies key criteria.
These include evaluating proposals for a settlement based on a borrower's individual circumstances, a process that requires full and transparent disclosure of a customer’s financial affairs.
Mr O'Keeffe said the customer must also demonstrate a willingness to meet contractual obligations while maintaining "a reasonable and benchmarked lifestyle".
Any proposals must address all of the borrower’s obligations with the bank, he added, and take account of any third-party debt.
He said it then determines the level of sustainable and unsustainable debt, while any proposals will include a requirement for the borrower to offer to the bank any windfall income, they may receive during a set period after the settlement.
The bank’s statement also details how it has a "dedicated, experienced, and well-resourced unit", called the Financial Solutions Group, to support customers in difficulty and the resolution of non-performing loans.
Mr O'Keeffe said it has a comprehensive list of initiatives and supports that are offered by it to customers in difficulty.
It also has a framework of controls in place to ensure its actions are consistent, fair and robust.
"This framework of controls and range of policies and solutions have enabled us to balance our prudential requirements to reduce our non-performing loan exposures whilst at the same time treating customers fairly and consistently," Mr O'Keeffe said.
"Our policies are directed by clear rules and principles that are applied consistently with respect to the identification, assessment, granting, management, monitoring and reporting of forbearance processes and decisions, in line with regulatory requirements."
"Our primary objective is to engage with the customer and to make every effort to come to an agreed arrangement to adapt to their changed financial circumstances."
Forbearance and support of customers can be either consensual or non-consensual, Mr O'Keeffe added, with the latter possibly involving recovery of debt through the legal process.
"Legal action generally only arises where customers have not engaged with the bank about their non-performing debt," he said.
"They are still afforded the opportunity to engage or re-engage to settle any outstanding liability at any stage in the process including post disposal of the assets involved."
"If they do, this may lead to a situation where a final settlement or compromise is agreed that may include a partial or full write-off of debt."
Sinn Féin's finance spokesman, Pearse Doherty, said the public deserve to know whether AIB has a policy of special treatment for the top 1% in the country.
Mr O'Keeffe said he understood that the issue has caused a lot of heartbreak in recent days, but confirmed that the bank does not have any such policy.
"We deal with every case consistently and fairly," he said.
"We have a governing set of policies that are reviewed internally right up to the board. We have a regulator who quite correctly monitors our activity. We have various lines of defences as I mentioned a while ago."
"But I can categorially tell you there are no special deals for special individuals coming to AIB."
Asked by Mr Doherty how many of the 1,900 borrowers who received a debt write down of over 90% since 2015 had loans of over €1 million, Mr O'Keeffe said he didn't want to get into the numbers because the bank is due to report financial results next week.
He said the bank does publish how much it writes off overall each year, and he would enquire as to whether he could answer the question about the total value of the loans of the 1,900.
"But it is fair to say that within that grouping there would be loans of that magnitude," the banker stated, referring to the €1 million figure.
Pressed by Mr Doherty, Mr O'Keeffe added that a majority of the loans would not be over a million euro.
He said the key assurance he could give is that among the 1,900, whether the loans were €1 million or €4 million, the borrowers were subjected to the same consistent policy application.
"There were no special deals in that 1,900," he stated.
Aontú leader, Peadar Tóibín, said in the public's experience, it was very seldom that a write-down is ever considered by a bank.
So when they do see volumes of money being written down, given their experience, it can create anger and frustration.
"I do think it is important for us to be able to understand what is the total value of that 1,900 writedowns," he told the AIB representatives.
"I know you refused to answer the average, but the total amount. Because it could be €2 billion for all we know which was written down in that 1% cohort and if that is the case that is a serious element of the prudence of a particular bank."
Mr Tóibín also asked whether the bank could break down the 1,900 into categories, such as developers, builders, business people, farmers or ordinary people who bought a couple of houses that were over priced, for example.
Mr O'Keeffe said he didn't have a breakdown, but it is all of those categories, adding that he would take the question away as he would like to dimiss the concern that it is a certain cohort of people.
The AIB representatives also outlined the processes they go through to verify whether medical and other information provided to them is accurate.
The bankers also explained how if a borrower who reaches a debt settlement later receives a windfall, typically over the following five year period, they will be obliged to tell the bank.
They also said that if a borrower has a windfall gain during the five years and doesn't tell the bank, the lender has recourse if it finds out after the five years.
But Mr O'Keeffe added that over the years that hadn't been an issue for the bank.
Instead, he said, the biggest issue the bank has is that during the agreement of restructurings, borrowers try to put assets and earnings beyond the bank.
Questioned by Fine Gael's Bernard Durkan about how many home repossessions the bank has made, Mr O'Keeffe said there had been eight since 2017.
But he added that the bank had agreed nearly 300 mortgage to rent deals with customers over the same time period.
Mr Durkan said he does think it is important that the public gets to know that the rules that are being applied are the same for everyone and that there is no suggestion of special rules for special people.
Minister for Public Expenditure, National Development Plan Delivery and Reform Paschal Donohoe said today it is critical that banks can demonstrate that large debt writedowns happened after a process was followed and that these writedowns were fairly applied.
Speaking on RTÉ's Claire Byrne, the Minister said there are issues of equity that need to be publicly explained.
