Loan Sales Creating Uncertainty for Irish Business Owners
It has been a sad number of weeks for Businesses right across Ireland.
The indigenous Banks have now taken to selling their loan books to American Vulture Funds. The latest that has been widely reported but in a very banal and mundane fashion particularly by some of the local media has just reported that the Vulture funds are buying these loans particularly from Ulster Bank, The RBS Group and their reconstruction division R.C.R. This is a sure sign if we needed to be told of how distressed Ulster Bank are and their draconian model for dealing with impaired borrowers and how they would exit the Irish Market.
Their new business model would appear to be to support people who would require new lending not necessarily for new businesses but who have cash in the Bank. We could all do that as there is very little risk involved. However what about lending to those people previously who now find themselves as part of the vulture fund loan sales.
The question has to be asked from not only a business but from a moral perspective, if Ulster Bank made funds available to these borrowers and are now selling the loans what lies ahead for the borrowers? What thought have Ulster Bank given the fate of their clients and customers who they lent money to and who are now with the Vulture funds from the United States? As has been widely reported by us and in other media outlets there is no debt forgiveness with the Vulture Funds.
They are not a Bank - they are a Business. They are there to make as much money as possible. I am not saying that they are making as much money as possible at whatever cost to the borrowers and it would be unfair of me to criticise their business model as they are seeing and taking up an opportunity presented to them on a plate by the financial institutions who are now selling their loans.
Surely our overriding concern should be for the treatment of the borrowers? The Banks and in particular Ulster Bank lent and advanced money to them recklessly and now like Pontius Pilate they are washing their hands of the problem. Will the borrowers now be crucified by their new Masters?
We would like to ask Ulster Bank one more time because there is a deathly silence from them in this regard if have they no regard for their incumbent clients and customers whose loans they are selling wholesale to the American Vulture Funds?
The knock on affect as previously raised by GDP on the borrowers and business in Northern Ireland will be extremely dramatic and felt right across the Province and indeed throughout Ireland.
It is noticeable that PriceWaterhouseCoopers have come out and said that the Northern Ireland budget is not balanced for 2015/2016 and that this is the sign of grave AUSTERITY to come for the residents of Northern Ireland. The Loan sales will only add to this. The sale of the loans by the Ulster Bank rather than work through the problems with the borrowers will only heap further misery on distressed borrowers who have been going through professionally and personally a most distressing at this time since the crash.
We further call upon the media to investigate these sales and hold these Bankers to account.