As the Deputy will be aware I have met with the Boards of the Covered Institutions on a number of occasions. As part of the general discussions that have taken place at these meetings issues relating to mortgages have been discussed.
The Central Bank has requested that the Deputy provide further details on the information that he is requesting to ensure that it provides the exact information the Deputy is requesting.
The covered institutions have also provided the following information.
AIB
All relevant data in relation to AIB s mortgage portfolios, including arrears data, for December 2013 are made on pages 71 to 119 of AIB s 2013 Annual Financial Report, published on 5 March 2014. AIB has not changed its variable rates for existing customers since June 2013. The Central Bank of Ireland requires the Board of AIB to consider the impact of arrears, prior to approving a residential mortgage variable rate increase. Forecasting models are run to access the impact for any rate increases on affordability and subsequent impact on arrears and losses.
Bank of Ireland
As a public company Bank of Ireland provides extremely comprehensive disclosures on its Irish mortgage portfolios in its annual reports and in its investor presentations which are available on its website http://www.bankofireland.com/investor and http://www.bankofireland.com/fs/doc/wysiwyg/boi-year-end-2013.pdf
Permanent TSB
ptsb has c. 163,000 Residential Mortgage accounts of these c. 82,000 are on a variable rate mortgage. ptsb has c. 41,500 Residential Mortgage accounts in forbearance or default. Of these c. 22,000 are variable (so 13.6% of ptsb mortgages are variable and in forbearance/default or 53% of their mortgages in forbearance/default are variable).
a. Changes to any of the bank's mortgage rates go through a full Governance process including approval by ALCO and sign off by the ptsb Board. This is part of the bank's normal commercial operations and does not require, nor is it part of their approval process to obtain Regulator approval. In the same way the bank adjusts pricing on their deposit products without Regulator approval.
b. The decision on where to set the bank's Variable Mortgage Rates is driven by a range of commercial and customer considerations including cost of funding, competitor rates, their assessment of the risk/return trade off, Regulatory and Stakeholder requirements.
c. ptsb reduced its SVR rate from 4.69% to 4.34% in July 2012 and maintained this at 4.34% until June 2014 when it was adjusted to 4.5%.
d. Since the bank's last rate cut in July 2012 it has significantly reduced its funding from the ECB and replaced it with more expensive deposits and market funding. While this increased pressure on the bank's profitability they maintained the SVR rate. This was influenced by the factors in (b) including the competitive environment the bank operates in.
e. The bank has also made some small changes to their variable rates driven by their competitive positioning.
