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PMS makes only half its scheduled bailout loan repayments to DETI Presbyterian Mutual Society makes only half its scheduled bailout loan repayments to DETI
(35 minutes later)
The Presbyterian Mutual Society (PMS) could only make half of its scheduled bailout loan repayments to the Department of Enterprise (DETI) in 2013 and 2014.The Presbyterian Mutual Society (PMS) could only make half of its scheduled bailout loan repayments to the Department of Enterprise (DETI) in 2013 and 2014.
The PMS went into administration in November 2008.The PMS went into administration in November 2008.
The department bailed out the insolvent society with £225m of loans in 2010.The department bailed out the insolvent society with £225m of loans in 2010.
Annual instalments are due to repay £175m over 10 years with the £50m balance being paid when the society is wound up.Annual instalments are due to repay £175m over 10 years with the £50m balance being paid when the society is wound up.
The reduced annual payments for the last two years mean that is possible a bigger lump sum will have to be found at the winding up stage.The reduced annual payments for the last two years mean that is possible a bigger lump sum will have to be found at the winding up stage.
The most recent PMS accounts, for the year ended March 2014, state that in 2013 just under £9.7m was repaid. That consisted of £6.5m capital with the remainder in interest.The most recent PMS accounts, for the year ended March 2014, state that in 2013 just under £9.7m was repaid. That consisted of £6.5m capital with the remainder in interest.
The accounts state that this was "50% less than the original capital repayment schedule agreed by DETI".The accounts state that this was "50% less than the original capital repayment schedule agreed by DETI".
The PMS is largely repaying the loans from the rental income earned on its investment properties.The PMS is largely repaying the loans from the rental income earned on its investment properties.
The society was forced into administration in 2008 after a run on withdrawals when members realised it was not covered by new government deposit guarantees.The society was forced into administration in 2008 after a run on withdrawals when members realised it was not covered by new government deposit guarantees.
Nearly 10,000 Presbyterians lost access to their savings.Nearly 10,000 Presbyterians lost access to their savings.
The bailout allowed for smaller savers, who invested less than £20,000, to get all of their money back in 2011.The bailout allowed for smaller savers, who invested less than £20,000, to get all of their money back in 2011.
'Market conditions''Market conditions'
Larger investors got 85% with the remaining 15% dependent on the disposal of PMS properties and other assets.Larger investors got 85% with the remaining 15% dependent on the disposal of PMS properties and other assets.
A DETI spokeswoman said: "When the £175m loan was provided to the Presbyterian Mutual Society in 2011, the forecast repayment schedule was dependent upon a number of assumptions and variables, including market conditions and the future prospects for the recovery of the property market.A DETI spokeswoman said: "When the £175m loan was provided to the Presbyterian Mutual Society in 2011, the forecast repayment schedule was dependent upon a number of assumptions and variables, including market conditions and the future prospects for the recovery of the property market.
"The joint supervisors for the PMS sought the agreement of the department to reschedule 50% of the capital repayments forecast for 2013/14 and 2014/15 as noted in the PMS accounts for 2013/14."The joint supervisors for the PMS sought the agreement of the department to reschedule 50% of the capital repayments forecast for 2013/14 and 2014/15 as noted in the PMS accounts for 2013/14.
"Having reviewed the position, the department accepted the request. This does not alter the requirement on the society for the full repayment of the loan.""Having reviewed the position, the department accepted the request. This does not alter the requirement on the society for the full repayment of the loan."
In a statement, the joint supervisors of the PMS said: "The original schedule of repayments was based on an assessment of future cash flow which was made at the time the scheme was drawn up.In a statement, the joint supervisors of the PMS said: "The original schedule of repayments was based on an assessment of future cash flow which was made at the time the scheme was drawn up.
"The deferral is due to changes to the assumptions used at the start of the scheme including variations in market conditions, timing of events and the recovery of the property market."The deferral is due to changes to the assumptions used at the start of the scheme including variations in market conditions, timing of events and the recovery of the property market.
"It is still the intention of the joint supervisors to repay the loan over the period of the scheme.""It is still the intention of the joint supervisors to repay the loan over the period of the scheme."