BoI admits to €14m bank scheme error

BANK of Ireland underpaid the State to the tune of €14m during the years it benefited from the Government’s controversial bank guarantee scheme, which helped stave off the collapse of the Irish banks in the aftermath of Lehman Brothers’ failure.

The money was supposed to have been repaid to the National Treasury Management Agency (NTMA), the scheme’s operator.

But recent accounts from the State spending watchdog, the Comptroller and Auditor General (C&AG), show that Bank of Ireland only discovered the error as it was preparing to exit the eligible liabilities guarantee (ELG), which covered new bonds and deposits for a maximum of five years and replaced the initial two-year bank guarantee imposed in 2008.

The C&AG documents show the lender made “an out of course payment of €14m” in August 2016 “for ELG fees due”.

The Government shut the scheme to new liabilities in 2013 and, under the rules, it was up to each bank to calculate the amount of fees owed to the State. But Bank of Ireland’s miscalculation is likely to fuel questions about the scheme’s structure.

The NTMA did not spot the error and relied on lenders to submit the correct amount of fees. A spokesperson said the organisation “has no role in calculating or assessing this liability”. He pointed out Bank of Ireland “identified the error and rectified it in accordance with scheme rules”.

Meanwhile, the British Chamber of Commerce launches #Agenda2018 today, a yearlong programme of events designed to highlight the impact of Brexit on SMEs, the ICT, infrastructure, life sciences, financial and professional services, agribusiness and culture, arts, sports and tourism sectors.