Struggling borrowers will be best served securing “individually tailored” easing of terms of their loans as the Republic faces into tighter Covid-19 restrictions, rather than banks offering blanket payment breaks again, Central Bank deputy governor Ed Sibley has said.

For some, fresh temporary payment holidays could be the right solution, but others will need different options, he said.

“The payment breaks gave breathing space to both the borrowers and the lenders. We’ve been making sure that lenders were very actively preparing for what was going to come next and be able to provide support to borrowers. That work, while not perfect, has been done,” Mr Sibley told The Irish Times.

“We’re now seeing a subset of those sectors, businesses and borrowers that were affected by the first full lockdown are going to be affected by the new restrictions being put in place. There may be both short-term and longer-term effects there. That still leads us to thinking individually tailored solutions are better in the longer-term interest of the borrowers.”

Loan restructuring

Irish lenders granted more than 150,000 payment holidays of between three and six months to households and businesses in the Republic between March and the phasing out of European guidelines at the end of September. Since then, banks have returned to offering individual forbearance or loan restructuring solutions to borrowers unable to return to regular payments after the breaks, as well as customers that have run into fresh difficulties.

Banking & Payments Federation Ireland (BPFI), the industry representative body, said on Tuesday that lenders “recognise the financial challenges that moving to Level-5 poses for many people”.

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