Dáil Éireann Debate, Wednesday - 16 November 2011
78 Deputy Liam Twomey asked the Minister for Finance the average interest that the guaranteed banks pay on money they lend on mortgages here; the way this compares with the interest paid by mortgage holders in the same institutions; and if he will make a statement on the matter. [34929/11]
View answer79 Deputy Liam Twomey asked the Minister for Finance the average interest that the guaranteed banks charge on money they lend for commercial loans; the average interest rate charged to the banks to borrow this money; and if he will make a statement on the matter. [34930/11]
View answerI propose to take Questions Nos. 78 and 79 together.
None of the guaranteed banks publically discloses the average interest charged by product type as it is commercially sensitive information. However, I have set out in the following table publically available information from the three major covered banks' recent results which indicate the net interest margin being generated. Net interest margin is a measure of the difference between the interest income generated by and the amount of interest paid out on funding, relative to the amount of their assets.
|
Six months to 30 June 2011 |
AIB |
BOI |
PTSB |
|
Net Interest Income (excluding ELG costs) |
€860m |
€966m |
€212m |
|
Net Interest Margin (excluding ELG costs) |
1.36% |
1.33% |
0.97% |
|
ELG Costs |
€256m |
€239m |
€93m |
|
Operating profit/(loss) before provisions(excluding LME gains and including operating costs) |
(€125m) |
€163m |
(€54m) |
Interest income is influenced by the mix of loan books they hold with a wide range of interest rates charged depending on product type. Interest costs arise from a variety of funding sources including deposits, funding from authorities, inter-bank funding and various wholesale funding sources including repos, securitisations, covered bonds, mortgage backed securities etc.
