AIB agrees to answer questions on DJ Carey debt write-down at Oireachtas committee

AIB has agreed to appear before an Oireachtas committee next week to answer questions about debt write-down following the controversy around the settlement agreed for Kilkenny hurling star DJ Carey.

Senior management from the majority State-owned bank will address the Oireachtas finance committee next Thursday after being invited to attend the committee over Mr Carey’s debt deal.

Several members of the committee had called on the bank to explain how it signs off on debt settlement agreements after concern was expressed about the size of the write-down.

Fianna Fáil TD for Carlow-Kilkenny John McGuinness, the chairman of the committee, said that it had sent questionnaires to AIB and the other banks asking how they treated customers in various categories when it came to debt resolution processes that will help guide the questioning of AIB’s managers.

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“It is important that in the public interest we question the bank and publicise the response to the questions from the other banks also so that people see that there is transparency, accountability and a structure there,” Mr McGuinness said.

“We will test that structure and make sure that it is robust enough to deal with the various questions around debt resolution.”

[ Sale of golf properties linked to DJ Carey raised €1.8m towards his AIB debt ]

[ DJ Carey debt: eye-watering write-off deals now common on Celtic Tiger loans ]

Mr McGuinness said the committee would not be getting into the specifics around Mr Carey’s debt settlement agreement with AIB but that he expected that people would be able to deduce from the bank’s answers to the committee’s questions around how similar cases are dealt with generally.

AIB secured a High Court judgment for €9.5 million in 2011 arising from loans secured on properties at Mount Juliet in Kilkenny and the K Club in Kildare.

Three properties at the golf resorts owned and linked to Mr Carey were sold in 2014 and 2015 generating proceeds of €1.8 million, most of which went towards the reduction of his debts.

The bank subsequently agreed a settlement of €60,000 in full and final settlement of the remaining debt, amounting to a debt write down of about €7.7 million or 80 per cent of the 2011 court judgment.

In response to political reaction to an RTE report last week suggesting a much larger write-down, AIB took the unusual step of issuing a circular to staff on Tuesday responding to the “external commentary over recent days” around the debt deal and how it “does not provide the full picture.”

The bank’s managing director of retail banking Jim O’Keeffe told staff in the memo that it exhausts “all appropriate avenues ” to realise secured assets in the recovery of debts and follows a “robust” governance process for debt resolution cases.

The timing of the bank’s public appearance before the committee could pose challenges for the bank as AIB is in a closed reporting period in advance of the publication of its 2022 annual results on March 8th.

This may constrain the bank’s chief executive Colin Hunt or chief financial officer Donal Galvin from appearing at the committee hearing. It has not yet been decided who will appear for the bank.

The bank had been offered an alternative later date to appear before the committee, March 22nd, after the financial results but opted to appear next week.

Any discussion around Mr Carey’s debt agreement will likely be constrained by the bank’s inability to discuss individual customer cases for legal and confidentiality reasons.