Dáil Éireann Debate, Tuesday - 16 October 2012
177. Deputy Pearse Doherty asked the Minister for Finance pursuant to the approval by the Competition Commissioner at the European Commission, of the State-aid provided to Bank of Ireland, Allied Irish Banks and Permanent TSB, the way standard variable rate mortgage borrowers in negative equity can switch to cheaper alternative lenders. [44284/12]
View answerBank of Ireland has been granted four state aid approvals between 2009 and 2011. These have been published by the European Commission in redacted form on its website under the decision numbers, N149/2009, N546/2009, SA.33216 and SA.33443. There is no reference in the State-aid documents to methods for standard variable rate mortgage borrowers in negative equity switching to cheaper alternative lenders.
However, in the State Aid approvals for Bank of Ireland published as N546/2009 and SA.33443 (2011/N) commitments were put in place for both the State and Bank of Ireland to implement market opening measures, which aim at decreasing the cost of entry for new competitors, or the cost of expansion for small competitors, in Ireland.
Bank of Ireland (BOI) will operate two market opening measures
(1) A Service Package and
(2) A Customer mobility package
In relation to mortgages, from 2013 -2015, BOI has committed to providing a mail marketing service to a Relevant Competitor where the relevant competitor’s share of the market is less than 15% and BOI’s market share is above 30%. In this case, BOI will randomly select at the request of the Relevant Competitor, a percentage of its mortgage customers and send them a copy of the Relevant Competitors marketing material. These mailings will be divided over six periods of six months and different selections will be made each time. However, it would then be at the discretion of the Relevant Competitor whether to engage with a particular mortgage customer, with a view to providing a loan.
Irish Life & Permanent Group Holdings plc (now Permanent TSB Group Holdings plc) was granted State Aid approval on 20 July 2011 for the recapitalisation that took place. In the State Aid decision SA.33311 (2011/N) which has been published by the European Commission in redacted form on its website there is no reference to the matters referenced.
Allied Irish Banks plc has been granted three State Aid approvals between 2009 and 2011. These have been published by the European Commission in redacted form on its website under the decision numbers N241/2009, N553/2010 and SA. 33296 (2011/N) and there is no reference to the matters referenced.
