KBC want to leave the Irish Market

Pa ElGrande

AndrewJRenko wrote: »

Yeah, it is very difficult, and that's why they're paid the big bucks. If it was easy, sure any of us could do it.

They have access to the best of economic expertise so there is no excuse for not doing the right thing.

Therefore . . . if we paid our politicians more they would make better decisions?

I'm sure it is said somewhere that economists have predicted nine of the last five recessions, that profession has an unblemished record of failure.

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?

The reality is that successive Irish government (and others abroad) have been running persistent deficits for a long time, and if you gave them the Sahara desert to manage it would eventually run out of sand. That's the nature of these governments you have to go back to the era of W. T. Cosgrave to find a fiscally prudent government. Anyway we are going off track here, the topic is KBC trying to leave the Irish market, why and and can we figure the consequences.

jimmycrackcorm

A very significant reason for the banks pulling out is the very high capital reserves required by the central bank. While this is as a result of the financial crisis, the core problem that it cannot be reduced is because it's nigh on impossible to repossess.

jimmycrackcorm

jimmycrackcorm wrote: »

A very significant reason for the banks pulling out is the very high capital reserves required by the central bank

Capital requirements are set by the ECB, not the CBI.

A Tyrant Named Miltiades!

A Tyrant Named Miltiades! wrote: »

thats not a technical anomaly. A technical anomaly world be an accounting exception. Computer chips and pharma are industries, which yes, did, buoy up the economy. The point being, we are not in recession as you claimed.

I think you know that Ireland’s GDP is highly distorted. The actual real economy where people actually work has fallen off a cliff. Pharma Exports add to GDP but not so much to employment.

KBC was profit making, I see no indication of existing problems with their loan books. If I were you, I'd argue that I am wrong to state that KBC is predicting problems with its loan books, and instead, you might say, are just seeking wider profit margins elsewhere. That would be a sustainable argument, but the above is not.

I did say they weren’t predicting future problems.

[Deleted User]

[Deleted User] wrote: »

Capital requirements are set by the ECB, not the CBI.

That seems to be true though it’s higher here.

https://www.irishtimes.com/business/financial-services/banks-say-tough-capital-rules-are-reason-for-higher-irish-mortgage-rates-1.4485518?mode=amp

The problem is we would get another bubble if the cost of borrowing collapsed.

Mad_maxx

AndrewJRenko wrote: »

They both have blood on their hands, for sure.





Dunno about you, but I expect leadership from Ministers, not following the crowd.

populism has always ruled in Ireland , as the saying goes in many countries

" politicians know what needs to be done , the problem is getting elected after you do them "

[Deleted User]

[Deleted User] wrote: »

That seems to be true though it’s higher here.

https://www.irishtimes.com/business/financial-services/banks-say-tough-capital-rules-are-reason-for-higher-irish-mortgage-rates-1.4485518?mode=amp

The problem is we would get another bubble if the cost of borrowing collapsed.

It's higher here because our default history is significantly worse. This impacts the calibration of models which calculates capital.

Larbre34

This is terrible news for the consumer, a lovely bit of business for BoI, and a gift from God for KBC. KBC get to exit a dysfunctional market, and BoI get a nice big chunk of business, that the state will foot the bill for if it all goes wrong.

Larbre34 wrote: »

The question must be asked, how in a single market and monetary union, the banking markets are defined by nation.

Great question. I've the same question about insurance. Makes no sense to me.

Gatling wrote: »

Did I remember correctly it's takes something like 10+ years of legal actions to get a full repossession here ,

Seen a case where a tenant literally caused €16,000 + damage to a rental property and paid no rent for over a year yet the tenant only had to pay around 2k in compensation to the landlord.

Crazy property situation here

Repossessions are incredibly expensive and time consuming. We've countless empty units on our books. No point renting them out either. We used to rent them out, but people just thrashed them. It is cheaper to leave them unoccupied. To make matters worse, I've a feeling, , that the current government is going to make it more difficult, impossible even, to repossess a property, and I strongly suspect that evictions will be a thing of the past also. The next government (SF + lefties) will do it for certain. I've worked in the sector in a number of countries around the world, and Ireland is an absolute mess.

Mad_maxx wrote: »

we are a nation of children

You really do need to grow up and start behaving like adults. A colleague of mine says that you are like a bunch of angry teenagers. Everyone else is to blame. It's never your fault.

AndrewJRenko

Mad_maxx wrote: »

populism has always ruled in Ireland , as the saying goes in many countries

" politicians know what needs to be done , the problem is getting elected after you do them "

That's because we have this awful habit of electing populist politicians.

Mad_maxx

tara2k wrote: »

This is terrible news for the consumer, a lovely bit of business for BoI, and a gift from God for KBC. KBC get to exit a dysfunctional market, and BoI get a nice big chunk of business, that the state will foot the bill for if it all goes wrong.



Great question. I've the same question about insurance. Makes no sense to me.



Repossessions are incredibly expensive and time consuming. We've countless empty units on our books. No point renting them out either. We used to rent them out, but people just thrashed them. It is cheaper to leave them unoccupied. To make matters worse, I've a feeling, , that the current government is going to make it more difficult, impossible even, to repossess a property, and I strongly suspect that evictions will be a thing of the past also. The next government (SF + lefties) will do it for certain. I've worked in the sector in a number of countries around the world, and Ireland is an absolute mess.



You really do need to grow up and start behaving like adults. A colleague of mine says that you are like a bunch of angry teenagers. Everyone else is to blame. It's never your fault.

Where may I ask are you based?

The Student

tara2k wrote: »

This is terrible news for the consumer, a lovely bit of business for BoI, and a gift from God for KBC. KBC get to exit a dysfunctional market, and BoI get a nice big chunk of business, that the state will foot the bill for if it all goes wrong.



Great question. I've the same question about insurance. Makes no sense to me.



Repossessions are incredibly expensive and time consuming. We've countless empty units on our books. No point renting them out either. We used to rent them out, but people just thrashed them. It is cheaper to leave them unoccupied. To make matters worse, I've a feeling, , that the current government is going to make it more difficult, impossible even, to repossess a property, and I strongly suspect that evictions will be a thing of the past also. The next government (SF + lefties) will do it for certain. I've worked in the sector in a number of countries around the world, and Ireland is an absolute mess.



You really do need to grow up and start behaving like adults. A colleague of mine says that you are like a bunch of angry teenagers. Everyone else is to blame. It's never your fault.

There might be a change coming. The Govt are in the process or authorising private security personnel to be involved in the eviction process. The article is in today's paper.

Without doubt one of the reasons KBC/Ulsterbank are leaving the market is the difficultly in obtaining repossessions and the relative small size of the Irish market.

With property prices increasing you would wonder why a bank would leave the market if they could repossess a property and sell it on to discharge the outstanding balance on the mortgage.

I do fear if those parties on "The left" were in power the damage they could do to the property sector could put us in a worse place then we are already.

Unless we deal with those who can't afford their mortgages every other mortgage holder and the wider society will be effected and competitors will never enter the mortgage market.

Kivaro

The Student wrote: »

There might be a change coming. The Govt are in the process or authorising private security personnel to be involved in the eviction process. The article is in today's paper.

Without doubt one of the reasons KBC/Ulsterbank are leaving the market is the difficultly in obtaining repossessions and the relative small size of the Irish market.

With property prices increasing you would wonder why a bank would leave the market if they could repossess a property and sell it on to discharge the outstanding balance on the mortgage.

I do fear if those parties on "The left" were in power the damage they could do to the property sector could put us in a worse place then we are already.

Unless we deal with those who can't afford their mortgages every other mortgage holder and the wider society will be effected and competitors will never enter the mortgage market.

It was the so-called right leaning parties FFG who put us in this predicament in the first place. And the nonchalant response from our current finance minister speaks volumes to another bank leaving the Irish market due to the impossibility of getting redress from people who do not pay their mortgages. It is surreal watching FFG implement liberal left policies that those parties can only dream of.

mariaalice

If its the lack of repossession is the problem I would not worry, SF Pearse Doherty said on an RTE radio program there has to be repossessions.

Like most things it probably far more complex than simple repossession.

It's handy to have an easy answer and an easily identifiable baddie though.

coolshannagh28

The market is too small and too volatile , the repossession issue is a symptom of the problem not the cause . Ulster and KBC suffered hugely when property crashed after 07 and see the market here repeating that huge peak to trough rollercoaster as Covid fallout and Corporation tax headwinds slow us down again.

The Student

mariaalice wrote: »

If its the lack of repossession is the problem I would not worry, SF Pearse Doherty said on an RTE radio program there has to be repossessions.

Like most things it probably far more complex than simple repossession.

It's handy to have an easy answer and an easily identifiable baddie though.

It is not just the lack of repossessions that is the cause of firms leaving the market. It is however part of the reason.

mariaalice

The Student wrote: »

It is not just the lack of repossessions that is the cause of firms leaving the market. It is however part of the reason.

Of course, but if you went through this thread how much is about the complex issue it really is and how much is about repossessions.

The Student

Kivaro wrote: »

It was the so-called right leaning parties FFG who put us in this predicament in the first place. And the nonchalant response from our current finance minister speaks volumes to another bank leaving the Irish market due to the impossibility of getting redress from people who do not pay their mortgages. It is surreal watching FFG implement liberal left policies that those parties can only dream of.

One of the reasons were are in this predicament is people themselves. The govt played a part in this aswell.

I am old enough to remember purchasing my first home and it was kitted out with hand me down furniture etc. I remember seeing people in the early 00's not only getting 100% mortgages but 120% mortgages.

Properties where purchased fully furnished with everything matching etc. People were not forced to take these mortgages. They choose too, so it was not all due to the Govt.

I don't want to get into a political debate about this but my concern is that we need competition and trying to legislate a sector to much will lead to less competition hence the reason banks are leaving the sector. (Not the only reason but certainly one of them).

mariaalice

The Student wrote: »

One of the reasons were are in this predicament is people themselves. The govt played a part in this aswell.

I am old enough to remember purchasing my first home and it was kitted out with hand me down furniture etc. I remember seeing people in the early 00's not only getting 100% mortgages but 120% mortgages.

Properties where purchased fully furnished with everything matching etc. People were not forced to take these mortgages. They choose too, so it was not all due to the Govt.

I don't want to get into a political debate about this but my concern is that we need competition and trying to legislate a sector to much will lead to less competition hence the reason banks are leaving the sector. (Not the only reason but certainly one of them).

I am not having a pop at you, but again its looking fir someone to blame preferably someone easily identifiable, and point to some moral failing.

What percentage of the property market has 100% mortgages?

It also came right for a lot of people.

https://www.irishtimes.com/life-and-style/homes-and-property/we-paid-480-000-for-our-house-on-a-100-mortgage-what-could-go-wrong-1.4028767

The couple in that article or similar are not the cause of KBC leaving.

The bigger issue is how we as a society are almost at the mercy of worldwide financial institutions that we as a society and the government have little control over.

Hamsterchops

Must be something unpalatable about outsiders being allowed in, same with the Telecoms market with Eir (Eircom) keeping hold of the wires, wasn't BT sent packing a few years ago? or did they just find the Irish market too small & too much hassle?

Banks wise, what are we down to now, Bank of Ireland & Allied Irish + TSB

Eric Cartman

https://jrnl.ie/5414168

More restrictions on evictions... its like we as a nation are determined to cripple our housing market.

We’ll all be living in the shinners fast slap prefab flats before long.

Kivaro

It is almost a daily occurrence that we hearing about very large developments of new social housing becoming available or being built; 2 different stories today alone. And of course, in a couple of years every single person who wants a free home can just fly into Dublin and say the magic house word "asylum". And there is no cap on the amount of people who can get these free homes.

But there is one segment of our society totally forgotten, and they are getting squeezed and squeezed out of the housing market every day. And now with KBC leaving Ireland reduces our choices further; even with our mortgage rates the highest in Europe. The utter contempt that FFG has for this segment of Irish society, who are the segment working in order to pay for all of these new social homes, is becoming very noticeable.

The Student

mariaalice wrote: »

I am not having a pop at you, but again its looking fir someone to blame preferably someone easily identifiable, and point to some moral failing.

What percentage of the property market has 100% mortgages?

It also came right for a lot of people.

https://www.irishtimes.com/life-and-style/homes-and-property/we-paid-480-000-for-our-house-on-a-100-mortgage-what-could-go-wrong-1.4028767

The couple in that article or similar are not the cause of KBC leaving.

The bigger issue is how we as a society are almost at the mercy of worldwide financial institutions that we as a society and the government have little control over.

People have to take responsibility for their decisions (the State/Govt does to). If you look at your example here we have a couple who spent €480k on a property as a couple. What was wrong with spending a smaller amount on a similar size property elsewhere in Dublin?

People not paying their mortgage is one of the reasons KBC/Ulster bank and loan books being sold to Vulture funds is happening. If people were paying their mortgages why would a bank sell a performing loan book.

Granted there are some mortgages on tracker mortgages which banks are most likely losing money on (although I am not fully convinced of that fact).

Yes some people did benefit from the financial crisis. Thats life, some people succeed in life be it having the job they want, getting paid more than someone else doing exactly the same job.

That's exactly what life is all about. Not everybody's life turns out how they want it to. Buying a property is no different.

At what point do people take personal responsibility for their own actions rather than expecting society to do so. To bring this back to the topic in hand, non payment of mortgages is one of the reasons KBC is leaving the market. It is not the only but it is one of them.

mariaalice

The Student wrote: »

People have to take responsibility for their decisions (the State/Govt does to). If you look at your example here we have a couple who spent €480k on a property as a couple. What was wrong with spending a smaller amount on a similar size property elsewhere in Dublin?

People not paying their mortgage is one of the reasons KBC/Ulster bank and loan books being sold to Vulture funds is happening. If people were paying their mortgages why would a bank sell a performing loan book.

Granted there are some mortgages on tracker mortgages which banks are most likely losing money on (although I am not fully convinced of that fact).

Yes some people did benefit from the financial crisis. Thats life, some people succeed in life be it having the job they want, getting paid more than someone else doing exactly the same job.

That's exactly what life is all about. Not everybody's life turns out how they want it to. Buying a property is no different.

At what point do people take personal responsibility for their own actions rather than expecting society to do so. To bring this back to the topic in hand, non payment of mortgages is one of the reasons KBC is leaving the market. It is not the only but it is one of them.

Lack of personal responsibility is not why KBC is leaving the Irish market.

Kivaro

Kivaro wrote: »

It is almost a daily occurrence that we hearing about very large developments of new social housing becoming available or being built; 2 different stories today alone. And of course, in a couple of years every single person who wants a free home can just fly into Dublin and say the magic house word "asylum". And there is no cap on the amount of people who can get these free homes.

But there is one segment of our society totally forgotten, and they are getting squeezed and squeezed out of the housing market every day. And now with KBC leaving Ireland reduces our choices further; even with our mortgage rates the highest in Europe. The utter contempt that FFG has for this segment of Irish society, who are the segment working in order to pay for all of these new social homes, is becoming very noticeable.

As someone in that cohort, i.e saving for a mortgage and paying extortionate rent in Dublin CC have to agree. Do you have any insights into what is driving that contempt?

I find it fairly sickening the amount of new social housing being given to some people who are not paying their fair share towards society as a whole.

The Student

mariaalice wrote: »

Lack of personal responsibility is not why KBC is leaving the Irish market.

It is not the only reason KBC are leaving the Irish market but it is one of the reason.

Kivaro

Randall Wrong Peppermint wrote: »

As someone in that cohort, i.e saving for a mortgage and paying extortionate rent in Dublin CC have to agree. Do you have any insights into what is driving that contempt?

I find it fairly sickening the amount of new social housing being given to some people who are not paying their fair share towards society as a whole.

The contempt from FFG is driven by the lack of pushback from their voter base. If you look at Fianna Fail, their focus in the last couple of years was on social housing and it became the primary factor on their platform; yet they will receive very little votes from that block. Now look at where they are in the polls. They will be totally consumed by Fine Gael in the coming years.

I have a number of family members deeply affected by the lack of affordable homes but especially housing stock. They just cannot compete financially with councils and other housing agencies whose primary focus is to house those on social welfare and refugees. The deck is stacked against working people/families struggling to get their own homes, but the sad thing in all of this is that there is no political party out there who will stand up for them.

partyguinness

As someone who worked in the Irish mortgage property market between 2000-2010 and in England since then I can see the vast difference between enforcement in Ireland and in the UK.

In the UK, they take no ****. You stop paying- you’re out. No questions asked. Bankruptcy, insolvency and enforcement procedures are all well entrenched and developed. In comparison there is eff all in Ireland.

The speed of the Court procedure in the UK is dictated by the Courts- they set the deadlines not the lawyers. So, everything is moved along nice a swiftly.

Basically, in Ireland, you can stop paying, play the system to drag a matter out for years and the Court system is just not fit purpose or rather the system has not been put in place. The legal mechanism is simply non-existent. Judges will just kick the can down the road and of course the news headlines.

No wonder other lenders look in and go “Sod that”.

A lot of people on the Journal are accusing those of us who mention the lack of repossessions of attacking the working classes. Ignoring the fact that owning a house is generally middle class, anecdotal evidence would suggest that there’s a lot of businessmen and the rich stopping paying and sending the lawyers on the job. The middle class people that I know who got into difficulty kept paying, sometimes at reduced rates.

Business people are used to giving up and walking away.

Eric Cartman

Deleted User wrote: »

A lot of people on the Journal are accusing those of us who mention the lack of repossessions of attacking the working classes. Ignoring the fact that owning a house is generally middle class, anecdotal evidence would suggest that there’s a lot of businessmen and the rich stopping paying and sending the lawyers on the job. The middle class people that I know who got into difficulty kept paying, sometimes at reduced rates.

Business people are used to giving up and walking away.

sure three of our most prominent cases are ben Gilroy defending that family in that 3 million quid gaf on Sorrento road and that 4200sq ft mansion in meath that the planning board took 10 years to adjudicate on pulling down and that Georgian property worth a mil on mount joy square where the landlord wanted to sell but friends of Paul Murphy barricaded themselves in and trashed the place.

CarProblem

Deleted User wrote: »

A lot of people on the Journal are accusing those of us who mention the lack of repossessions of attacking the working classes

I'd say (assuming we'd sufficient supply) a lot more working class people could afford houses at French/Belgian/German mortgage rates than the Irish ones if we had French/Belgian/German repo systems

Studies have shown when people get into trouble they pay credit card debt, car loans etc rather than the mortgage in Ireland - I assume this because there is (reasonably) seen to be no consequence of not paying one's mortgage. I remember telling a UK based colleague that - he was incredulous