Cen­tral Bank tracker in­quiry look­ing at se­nior bankers:

The Irish Times - Business - - FRONT PAGE - JOE BREN­NAN

The Cen­tral Bank’s on­go­ing en­force­ment in­ves­ti­ga­tion into six mort­gage lenders’ han­dling of the tracker scan­dal is also look­ing at the ac­tions of in­di­vid­ual se­nior bankers.

Ap­pear­ing be­fore an Oireach­tas Fi­nance Com­mit­tee hear­ing yes­ter­day, Cen­tral Bank direc­tor gen­eral for fi­nan­cial con­duct Derville Row­land said her staff are “look­ing at the con­duct of the in­sti­tu­tions and the se­nior per­sons in there at the time tak­ing those de­ci­sions” as they con­tinue their in­ves­ti­ga­tion. The reg­u­la­tor is weigh­ing sanc­tions for pos­si­ble rule breaches.

Wrongly de­nied

The Cen­tral Bank, which had be­gun en­force­ment in­ves­ti­ga­tions into the six main re­main­ing mort­gage lenders by the end of last year, is look­ing at how banks wrongly de­nied thou­sands of bor­row­ers their right to a cheap mort­gage linked to the Euro­pean Cen­tral Bank’s main rate as far back as 2008, as well as their han­dling of the scan­dal in re­cent years, Ms Row­land said. The six lenders are: AIB and its EBS unit, Bank of Ire­land, Ul­ster Bank, Per­ma­nent TSB and KBC Bank Ire­land. Ms Row­land said she did not ex­pect any of the cases to con­clude this year.

As of the end of Au­gust, lenders had iden­ti­fied about 38,400 cus­tomers af­fected by the de­ba­cle and had paid €580 mil­lion in re­dress and com­pen­sa­tion, ac­cord­ing to the reg­u­la­tor.

Cen­tral Bank direc­tor gen­eral for fi­nan­cial con­duct Derville Row­land said her staff are “look­ing at the con­duct of the in­sti­tu­tions and the se­nior per­sons in there at the time

Some 93 per cent of these had re­ceived of­fers of re­funds and com­pen­sa­tion by the end of Au­gust. “Four of the five main lenders are close to com­plet­ing their re­dress and com­pen­sa­tion phases, and we are ex­ert­ing sig­nif­i­cant pres­sure on the re­main­ing lender to fin­ish its process,” Cen­tral Bank gover­nor Philip Lane told the com­mit­tee.

Com­pen­sa­tion

The lag­gard among the banks is known to be Ul­ster Bank, which said in April that it had iden­ti­fied an ad­di­tional 1,500-2,000 cus­tomers af­fected by the ex­am­i­na­tion. That is fur­ther to 3,500 cases pre­vi­ously dis­closed by the bank. A spokes­woman for Ul­ster Bank said the UK-owned lender will not com­plete re­funds and com­pen­sa­tion un­til next April. “We apol­o­gise sin­cerely and un­re­servedly for the length of time it is tak­ing for us to put this right and we are work­ing hard to con­clude re­me­di­a­tion,” she said.

Law changes in 2013 dou­bled the max­i­mum mone­tary penalty the reg­u­la­tor can im­pose on a fi­nan­cial firm for rule breaches, from €5 mil­lion to €10 mil­lion.

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