Bankers to be ‘held to ac­count’ over track­ers

Irish Examiner - - Business - Pádraig Hoare

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.

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