AIB chief insists DJ Carey received no special treatment following debt write-down

RTÉ’s Prime Time revealed how Mr Carey received a 99.37pc reduction in his debt of €9,528,411.

However, it is understood that the sale of properties at the K Club in Co Kildare and Mount Juliet in Co Kilkenny also went towards relieving the debt.

Therefore Mr Carey would have received an estimated write-down of about 80pc after the sale of the properties and the €60,000 settlement were taken into account.

Politicians are now calling for AIB to appear before the Oireachtas Finance Committee to explain the move.

In an internal memo to staff on Wednesday, AIB’s managing director of retail banking, Jim O’Keeffe, said that while he cannot comment on individual cases for legal reasons, he wanted to reassure employees “that the bank has a robust governance process for debt resolution and this process was followed”.

“You will have seen commentary in recent days about AIB’s approach to debt write-down and I wanted to clarify the matter,” the memo starts.

“Where customers are in financial difficulty, our resolution process is based on their ability to repay, taking account of the customers’ assets and their sustainable income levels.”

Mr O’Keeffe said this approach had ensured the bank had “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,” he said.

“In situations where the legal system is ultimately required to resolve cases, we may seek judgment to allow us 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 added that while the bank could not comment on individual cases, “some of the external commentary over recent days does not provide the full picture”.

It was revealed last week that Mr Carey reached the settlement with AIB in April 2017 and the bank confirmed it had received the settlement funds in April the following year.

The 99.37pc reduction of Mr Carey’s debt of €9,528,411 was referred to in a settlement document as a “compromise”.

The bank had previously secured a High Court judgment for the €9.5m, mostly arising from a €7.85m loan secured on properties at Mount Juliet in Kilkenny and the K Club in Kildare.

Mr Carey had also given personal guarantees of €1.5m.

The settlement agreement also included a so-called “windfall” clause. That meant that if Mr Carey received cash or assets that caused an increase of €50,000 in his net asset value, the money received would have to be paid to AIB.

The windfall clause, which covered any relevant “gift, award, inheritance, prize, lottery prize or gambling winnings” or “receipt or recovery”, lapsed by April 2022.

Politicians have been calling for AIB to appear before the Oireachtas Finance Committee to explain the move.

Sinn Féin finance spokesman Pearse Doherty said he had written to the committee urging them to invite AIB to appear before it.

Aontú TD Peadar Tóibín said he would question AIB on how many times such debt write-downs were given, the methodology and the role of the Government’s public interest directors.

When questioned in the Dáil about the write-down today, Taoiseach Leo Varadkar said: “I’m so 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,” he said.

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

“But that needs to be looked at, I think. And I can’t tell you how many have had writedowns of more than 90pc.” He speculated that the Department of Finance may have those figures.

AIB said it would not be commenting.