Bankers to be ‘held to account’ over trackers
The deputy governor of the Central Bank has said he expects individuals to be held accountable over the tracker mortgage scandal, which has affected an estimated 30,000 customers across the financial institutions.
Ed Sibley told a conference on corporate culture change that the main banks faced enforcement actions by the watchdog over their roles in the scandal.
Danske Bank has become the latest lender to come clean about its role in the scandal, saying it has identified 60 accounts where the wrong rate of interest was charged. It said on average, it had overcharged by 0.26%.
The bank said it identified 18 customers “who may have had a reasonable expectation of a tracker rate on expiry of their fixed rate mortgage” but it was not offered. Some €600,000 has been set aside to deal with cases, it said.
More than 20,000 customers have been identified as having wrongly been put on more expensive loans, with Bank of Ireland last week adding 6,000 to the 4,300 it had already identified.
Financial experts believe the figure will rise above 30,000 once the Central Bank has completed its review of two million accounts in more than a dozen lenders.
Mr Sibley told the Eversheds Sutherland Conference on leadership and culture change that individuals on boards of banks, as well as executives, had to take “a long hard look in the mirror” regarding their behaviour in the tracker scandal.
“The Central Bank is under no illusion that continued and concerted pressure is required to ensure all affected customers receive redress and compensation and banks comply with our findings. I expect all the main banks will be subject to Central Bank enforcement investigations,” he said.
“Moreover, I expect the boards, the individuals on the boards and the executives to be accountable and to be held to account for not only the initial decisions which started the consumer detriment, but the persistent and ongoing behaviours and decisions that magnified this harm over an extended period.”
He called for banking leaders to “actively consider” their responsibilities regarding disclosure and whistleblowing.
AIB is the only one of the five main banks — the others are Bank of Ireland, Ulster Bank, Permanent TSB and KBC Ireland — to not yet face enforcement proceedings.
Mr Sibley said: “As part of these investigations, interviews with relevant individuals have been and will be conducted, and large volumes of documentation have been and will continue to be gathered and reviewed.”
Of the 6,000 new cases identified by Bank of Ireland last week, up to 2,000 are its own staff. The 10,300 customers are by far the biggest cohort affected by a single bank. The bank had set aside €25m for redress and compensation, but said between €150m and €175m would now be set aside.
Ulster Bank said in its update last month that 3,500 had been identified, with 100 so far compensated, providing €211m for the cases.
AIB set aside €190m and has said the 3,400 affected would be redressed and compensated by early next year.
Permanent TSB set aside €140m and said of almost 2,000 accounts impacted, 1,448 have received redress and compensation. KBC Ireland said almost 1,700 were affected, with up to €60m set aside. Some €120m in redress and compensation has been paid to customers.