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Updated 18.19
HOMEOWNERS STUCK ON high variable mortgage rates shouldn’t expect much relief from two of the country’s biggest lenders.
Both Ulster Bank and Bank of Ireland bosses were today hauled before an Oireachtas Finance Committee to explain the premium charged on mortgages in Ireland compared to elsewhere in the eurozone.
And they weren’t giving away much despite political pressure to hand over some of their new-found profits to borrowers.
When Bank of Ireland chief executive Richie Boucher was asked if there was any plan for his bank to cut standard variable rates this year, he replied: “We look at our rates on an ongoing basis, I can’t make a commitment today.”
He said the bank would look at its cost of borrowing and the “competitive environment” before making any decisions.
Its cost of funds currently stands at just over 1%, compared to a standard variable interest rate of 4.5%.
Earlier, Ulster Bank chief executive Jim Brown said the bank had no intention of cutting standard variable rates despite charging a premium on loans in the Republic compared to the UK and Northern Ireland.
He said the bank’s variable rate simply reflected the price of lending in the market.
“We do not believe that our standard variable rate is overpriced,” he said.
The cost of providing mortgage finance in Ireland is substantially higher than in other jurisdictions.”
‘A slight misnomer’
However that claim appeared at odds with comments from Boucher, who said it was “a slight misnomer” that its Irish rates were significantly higher than those in the UK. He added there was little difference in costs between the two jurisdictions.
The big difference between our Irish business and our UK business in the mortgages is the historic loss experience,” he said.
All the major banks have been accused of being unwilling to pass on savings from record-low borrowing costs to existing customers because they needed to prop up their books, which were weighed down with loss-making tracker mortgages and accounts in arrears.
About 60% of the accounts on Ulster Bank’s mortgage book are on tracker rates, which follow the ECB’s official figure – currently at record lows – plus a small margin. For the Bank of Ireland, the share was around 56%.
But Brown said he was yet to come under any pressure from Finance Minister Michael Noonan to cut interest rates.
On Monday Noonan said he was calling in the six major lenders to ask them to cut mortgage rates as prices in Ireland moved further out of step with cheap lending across the eurozone.
‘No specific debate’
Brown said the bank had lost over €2 billion on its Irish mortgage book in last five years and unless the underlying costs involved in giving out loans came down it wouldn’t be able to cut its standard variable rates.
When asked if that meant it had no intention to make cuts, Brown replied: “That’s correct”. He added that he would be telling Noonan as much at any meetings, but there had been “no specific debate on mortgages” so far.
Last week AIB’s departing chief executive David Duffy said his bank would make interest rate cuts “in the next month or two” if favourable market trends continued.
Boucher, who earlier today was handed “The Bloody Keys” to Brian O’Donnell’s Gorse Hill mansion at the Bank of Ireland’s AGM, seemed fairly unimpressed with the move.
I can’t really comment on the strategies of someone that owes the taxpayer €21 billion,” he said.
First published 4.52pm
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This is so sad. There is something very dark and sinister about the Catholic Church in Ireland. They are like the mafia and think they’re untouchable. Time the truth was told.
And yet, despite all we know now about the physical, psychological and sexual abuse, we still allow the Catholic Church and its institutions to be interwoven with our taxpayer-funded education and healthcare systems.
We still put our weak and vulnerable in their care. Today.
Clare it defies logic. I see a lot of young people under 30 going to mass. 90 %still want to marry in a Catholic church.
This turns my stomach and I thought I couldn’t be shocked by any of our sordid past at this stage. Who are these people, with such little regard for human life?
Don’t get me started on Terry effing Prone and the Communications Clinic…
@Raisin: Terry Prone, the devil’s advocate.
Sorry, Roisin.
As long as there is no abortion, who cares about young babies and young mothers. Who cares about sewerage chambers. Just think of the foetus. On,y the foetus counts.
It wasn’t God who did this. It was power hungry bad people who used his name to do it. Once again we are shamed by our history. Those poor kids
@Mary Murphy and the Mothers as well as the children
@Mary Murphy: Yes, God only does the good things. The bad things are because of humans. Religion logic.
Obviously it wasn’t god, imaginary sky fairy’s don’t have the power to do things like that
Mary Murphy – well he didn’t bloody stop it either did he, but then he wasn’t moved enough by the rape of all the Irish children either. In fact, what will make him show himself, he did not even step in when his chosen people were subject to genocide.
@Mary
Your “God” doesn’t exist!
Matt I don’t practice any religion but it’s man’s humanity to man that leaves a lot to be desired. What is and was done in God’s name is an excuse to justify it
Carl I don’t practice any religion but what was done in God’s name was to control people and it was done by people.
George I too would love to know. And to think that poor Grace was living in hell recently whilst the people who are still in power is enough to sicken an elephant. Nothing changes apart from tribunal’s
@Paul Fahey: agree completely. But as the Sunday morning righteous would say ‘He’s testing us’.
@Paul Fahey: going right back to the old testament, that very same so called god commanded the genocide of the neighbouring tribes. If ever you wanted proof that religion was principally a propaganda device, look no further
Irelands Auschwitz. A sickening tragedy.
It’s beyond words. Another useless tribunal with no one held to account to come. Tuam babies, Grace and the McCabe scandal. State bodies for health and children implicated in all of them.
Anne Marie exactly. Another bad….. well I’m lost for words on this
I guess this will be an Unaccepted comment but I have to make it. Where is the responsibility of the parents who condemned their daughters to these homes? I get the church thing and the embarrassment for families. I lived it. But the parents who gave their daughters up to these facilities? Why do we not lay some of the blame on them? The facilities that accepted these unwanted Girls provided a service. Obviously a bad service, but their families dumped them. I cannot accept the family abandonment. Despite the social standards of the time how did mothers and fathers live with the denial of their child and grandchild. There is no easy answer here. We can not condemn one group without looking at the whole picture,
@mary: thank you for making this excellent point
What a country.
What a history.
Still the same lack of accountability even to this day.
Thus wasn’t god’s doing because god doesn’t exist. If it did, then its a very sad indictment of the absolute dregs of humanity it chose to represent itself on Earth.
@Daisy Daisy: How do you know God doesn’t exist? Have you a scientific explanation for the existence of virtually infinite matter?
Well if God exists he/she is an evil vile fecker!
So what you’re saying Paraic is that everything we can’t explain, we can put down to a God whose existence we also can’t explain?
@Jimmyjoe Wallace: I didn’t say that at all. But if a God did exist, it wouldn’t be any less incredible than the existence of the universe.
what the hell was wrong with these people? no excuse
And to think they wanted pennies for the black babies…Wool pulled over our eyes
I’m sure Terry Prone is eating crow now!! It’s just appalling what happened to those babies and small children!! Dumped in a septic tank!! All in the name of Christianity!! Poor little mites!! R.I.P. little angels!! I hope this won’t be swept under the Catholic Carpet!!!
The church was built on paganism, before the church we lived in a very hard world were you could be attacked and killed by animals other humans, raped, murder, robed, made a slave etc.. We class our self’s as one human but we are not some men and women would be happy with multiple partners and children from different fathers,others it one partner one father.
The church was probably started by a few good strong clever people, who saw the way of paganism as wrong, with only the strong ruling the land, where people could be harmed at any time, where people starved.
It got the weeker on board, it seen people with one life partner and children from one father less wild due to both loving parents been there to keep check, it seen when people work and live togetter they fight less. With this in the early days the church brought peace to the land and more join as it was better than living day by day.
But over the years it either misinterpreted it founding ways, the evil people who in the day of paganism got in and changed things,
Like with most with power without question or vote leads to corruption.
With this other groups formed, all with the same thing anything that resembles the days of paganism they destroy without though.
Even today any religions group has these views, and today we live more in line with our pagan ancestors that values of the the church.
The only good thing the church has done it has given us a better world, where most live by the law and get punished by it. If not we could be still running around killing one another
@JustMade Ireland:Did you stop taking your tablets?
@JustMade Ireland: are you serious,religion causes most of the wars
I’m sure all of that made sense in your own head as you were typing it. I understand the sentiment but the execution is atrocious.
@JustMade Ireland: it might be worthwhile considering that paganism was not all savagery. It’s an unspoken but untrue assumption that religion is needed for morality. However there is the empirical data pointing the reverse.
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