AIB defends DJ Carey debt deal as internal memo sent to staff

It was revealed last weekend that hurling star DJ Carey received a large write-down settlement with the bank over a debt of €9.5m.

RTÉ had reported that Mr Carey’s €9.5m debt was written down, with a settlement of €60,000, which the broadcaster said represented a 99.4% write-down on the original debt.

However, a source said the report did not take into account the sale of golf resort properties in the K Club and Mount Juliet and how the sale proceeds went towards the reduction of Mr Carey’s debt to the bank.

It is estimated that Mr Carey’s €9.5m debt was written down by about 80% when the sale of the golf resort properties and the €60,000 settlement are taken into account.

In an internal memo seen by the Irish Examiner, Mr O’Keeffe said that he cannot comment on individual cases for legal reasons but he wanted to reassure staff that “external commentary” in recent days does not provide the full picture.

Mr O’Keeffe said where customers are in financial difficulty, the bank’s resolution process is based on their ability to repay, taking account of the customers’ assets and their sustainable income levels.

“This approach has ensured that we have resolved over 150,000 customer cases over many years in a fair and consistent manner.

“We have found that the vast majority of customers are able to meet the terms of their new arrangement and move on with their personal and business lives,” it read.

Mr O’Keeffe went on to tell staff that in situations where the legal system is ultimately required to resolve cases, AIB may seek judgment to allow them to dispose of the secured assets and wider assets if appropriate.

“In such cases, the process seeks to exhaust all appropriate avenues to realise value for the bank from any available secured assets.

“It also may take account of third-party certification as to a borrower’s income and asset status and may also consider other documentation relating to the borrower’s personal circumstances,” the memo read.

The settlement agreed between AIB and Mr Carey was raised with Taoiseach Leo Varadkar in the Dáil on Tuesday who suggested that the Oireachtas Finance Committee could examine the broader area of how such agreements are reached.

“I’m reluctant to talk about any individual’s personal finances, whether they’re famous or not.

“But I think if the committee is meeting with the banks, they could certainly explore the wider policy approach that banks follow in writing down debts,” Mr Varadkar said.

Responding to Aontú leader Peadar Tóibín, Mr Varadkar added: “I imagine it’s linked to how much the person is able to pay back, rather than who they are.”

Mr Tóibín pressed the Taoiseach on the number of AIB write-downs that have exceeded 90%.

Mr Varadkar suggested that the Department of Finance may have data on this but said: “I don’t have them personally. There is a relationship framework, according to which the Department of Finance has engaged with the banks. It is based on ensuring that it (the relationship) is commercial and at arm’s length.” 

The finance committee was today writing to AIB bank to invite them in to discuss the general issues around debt write-downs.