BOI in­creases pro­vi­sion­ing to €200m in tracker scan­dal

BOI sets aside same amount as AIB de­spite twice the num­ber of clients af­fected Dis­par­ity partly ex­plained by fact 3,700 cus­tomers only over­charged small amount

The Irish Times - Business - - FRONT PAGE - EOIN BURKE-KENNEDY

De­spite hav­ing twice the num­ber of im­pacted cus­tomers, Bank of Ire­land has set aside roughly the same amount of money as ri­val AIB to com­pen­sate cus­tomers af­fected by the tracker mort­gage scan­dal.

In a state­ment yes­ter­day re­veal­ing an ad­di­tional 6,000 cus­tomers are in line for com­pen­sa­tion, Bank of Ire­land said it had in­creased its pro­vi­sion­ing for the over­charg­ing scan­dal to €200 mil­lion, up from the €26 mil­lion ear­marked. The lat­est pro­vi­sion charge equates to about 15 per cent of its pre­tax prof­its for last year.

While the in­creased pro­vi­sion­ing re­flects the jump in cus­tomers, wrongly moved off tracker mort­gages or over­charged on their ex­ist­ing ac­counts, it is only €10 mil­lion more than the €190 mil­lion set aside by AIB to cover just over 4,100 cases. The dis­par­ity be­tween the two num­bers may be partly ex­plained by the fact that some 3,700 tracker cus­tomers with Bank of Ire­land were ap­par­ently only over­charged a small amount.

Sig­nif­i­cant co­hort

A Bank of Ire­land spokesman said a sig­nif­i­cant co­hort of af­fected cus­tomers were over­charged by a rate dif­fer­en­tial of up to 0.15 per cent. In its ear­lier state­ment, the bank con­firmed that 10,300 cus­tomers were now due to be com­pen­sated as a re­sult of the over­charg­ing scan­dal, up from the 4,300 pre­vi­ously ad­mit­ted by the bank.

The new fig­ure makes the num­ber of im­pacted cus­tomers at Bank of Ire­land more than dou­ble that of its near­est ri­val AIB, which stands at 4,100 cus­tomers. Ul­ster Bank has 3,500 im­pacted cus­tomers while Per­ma­nent TSB and Bel­gian KBC have 1,971 and 1,661 re­spec­tively. De­spite be­ing de­tected nearly two years ago, the full ex­tent of the over­charg­ing scan­dal is only now com­ing to light. The to­tal num­ber of im­pacted cus­tomers is ex­pected to rise to nearly 30,000 once the Cen­tral Bank’s review is com­plete.

Min­is­ter for Fi­nance Paschal Dono­hoe has said he will de­cide by mid-De­cem­ber whether banks have made suf­fi­cient progress to avoid po­ten­tial sanc­tions in­clud­ing an in­crease in its an­nual bank levy.

Sinn Féin fi­nance spokesman Pearse Do­herty said: “The fact only in Septem­ber they [banks] were sup­posed to have pub­lished fi­nal fig­ures shows the on­go­ing con­tempt the banks have for the Cen­tral Bank’s process and for the vic­tims.” Mr Do­herty said pub­lic and po­lit­i­cal pres­sure must now be fo­cused on Ul­ster Bank whose timetable is piti­fully slow and on Per­ma­nent TSB who have re­turned cus­tomer to a rate well above what their con­tract en­ti­tles them to.

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