Dáil Éireann Debate, Wednesday - 6 April 2016
161. Deputy Pearse Doherty asked the Minister for Finance the provisions each State-backed bank has made for legal fees, compensation or other costs related to the Central Bank of Ireland's ongoing investigation into tracker mortgages or because of any Financial Service Ombudsman rulings on the issue of tracker mortgages; the cost incurred to date in each case for each bank; and if he will make a statement on the matter. [6153/16]
Amharc ar fhreagraAs the deputy may be aware, the Central Bank launched its review of tracker mortgages at the end of 2015.
AIB has informed me that it is carrying out a comprehensive and robust tracker mortgage review. AIB Group has provided €105 million relating to the refund of interest and other compensation amounts. Furthermore, the Group has recognised an additional provision of €85 million for:
(a) the accounting impact of a constructive obligation under IAS 37 for fair value remeasurement losses that will be recognised in areas where the Group will offer revised terms on mortgage accounts;
(b) tax liabilities arising from redress or other compensation which the Group may be required to discharge on behalf of impacted customers; and
(c) other costs associated with the examination.
The review is a significant undertaking, the Central Bank of Ireland has recognised the importance of giving AIB and all other industry players the necessary time to complete it. The Central Bank expects significant progress to be made by all lenders before the end of the year and AIB will certainly be meeting all the Central Bank timelines.
PTSB, who are currently under an enforcement investigation by the Central Bank of Ireland in relation to tracker mortgages have provided the following information.
In its 2015 results published on March 9th, Permanent TSB disclosed that costs to date arising from regulatory investigations into tracker mortgages, including redress payments which have been made to 90% of impacted customers, totalled approximately €40m. The Permanent TSB annual report is available at:
http://www.permanenttsbgroup.ie/~/media/Files/I/Irish-Life-And-Permanent/Attachments/pdf/2015/ptsb-full-year-report-09-03-2016.pdf.
Permanent TSB also disclosed that it had set aside approximately €100m (in addition to the €40m already incurred) to cover future costs arising from a) redressing the remaining 10pc of impacted customers and b) from the Central Bank of Ireland's wider industry review of tracker mortgages. Permanent TSB note that estimates of future costs remain subject to significant uncertainty.
Bank of Ireland have made the following disclosure on page 256 of their Annual Report;
"At 31 December 2015, the Group continues to monitor an industry-wide issue with respect to technical compliance with the UK Consumer Credit Act and is assessing an emerging industry-wide mortgage review with respect to compliance with certain contractual and regulatory requirements in Ireland. In accordance with IAS 37.92, the Group has not provided further information on these issues.".
The Bank of Ireland annual report is available at https://investorrelations.bankofireland.com//wp-content/assets/BOI-Annual-Report-2015.pdf.
