INTERNATIONAL banks’ claims against Irish borrowers declined by 18 per cent in the final quarter of 2010 as they shifted soured loans into state-backed bodies to be wound down, Bank for International Settlements (BIS) statistics show.
Total lending to Irish borrowers, including government and banks, fell to $462.3 billion at the end of 2010 from $563.7 billion three months earlier, according to statistics published by the BIS.
German banks’ claims on Irish borrowers declined by $36 billion to $118 billion in the quarter as Hypo Real Estate Holding AG moved assets to a so-called bad bank, the BIS reported.
“Transfers of distressed assets to non-bank asset management companies” caused foreign claims of the 24 reporting countries on banks to decline by $172 billion, according to a statement accompanying the report.
Hypo’s Depfa Bank unit, which transferred loans and other securities to FMS Wertmanagement, had its headquarters in Dublin’s International Financial Services Centre. German-based FMS-WM, which is winding up Hypo’s assets, doesn’t have a banking licence and so its claims on countries including Ireland are no longer reported.
In Greece, German banks have cut their holdings to $34 billion from more than $40 billion, while the French have reduced claims to about $57 billion from $63 billion, the figures show. –(Bloomberg)
