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Law360, London (April 30, 2020, 3:05 PM BST) -- Irish banks, lenders and credit providers said Thursday that they have agreed to extend a three-month mortgage break to six months for borrowers facing financial hardship because of the COVID-19 crisis, after nearly 90,000 households and businesses were granted relief.
The Banking and Payments Federation Ireland, an industry body whose members include banks and other specialist lenders, said it will extend the payment breaks by three months, taking it to September.
The trade group's members, which include the Bank of Ireland and Ulster Bank, initially agreed to support retail and business customers struggling with the economic fallout of the pandemic through a three-month payment break on March 18. But the body said its members agreed to the extension amid the prolonged and deepening crisis.
More than 65,000 households and 22,000 small and midsized enterprises have been granted mortgage payment breaks over the past six weeks, the group said.
"BPFI members strongly appreciate the severity of the impact on families, individuals and businesses and it is for this reason, that we believe an extension of the existing payment break beyond three months may be required by many customers," Brian Hayes, chief executive of the BPFI, said on Thursday.
The initial break was agreed between Irish Finance Minister Paschal Donohoe and major banks. The break has been described as a welcome step, but trade bodies worry that lenders may still charge interest to customers and businesses.
Donohoe has also called for insurers to be "proactive and generous" to cash-strapped customers, which could include partially refunding them for motor premiums. Fewer people are using their cars during lockdown, which means there is likely to be a reduction in claims costs, providing a profit bounce for insurers.
Other measures in response to the crisis include the Central Bank of Ireland temporarily removing the countercyclical buffer, a stash that banks are required to hold to protect themselves against market stress. The authority said it was designed to be dropped when banks face economic risks so that homeowners and businesses can use the money.
U.K. lenders have also committed to a three-month mortgage holiday. Lenders owned by the Lloyds Banking Group and the Royal Bank of Scotland have all confirmed they will offer to defer mortgage payments from borrowers affected by the virus outbreak.
--Editing by Ed Harris.
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