14 homes lost over Bank of Ireland role in tracker scandal

14 homes lost over Bank of Ireland role in tracker scandal

By Pádraig Hoare and Eamon Quinn

Some 14 customers have lost their homes because of Bank of Ireland’s role in the tracker mortgage scandal, its chief executive has revealed.

Francesca McDonagh, appointed four months ago, told TDs and Senators at the Oireachtas finance committee that compensation and redress for customers could “never fully reverse the negative effect the tracker issue has had” on them.

Some €68m has been paid by Bank of Ireland to more than 5,000 mortgage holders affected by the tracker scandal.

The number of homes lost has now increased to 14 from the previously revealed four, said Ms McDonagh. Of the 14, eight were owner occupied and the others buy-to-let.

She said of the total 9,400 affected mortgage holders, approximately 6,000 were denied a tracker rate and 3,400 were on a tracker but on an incorrect rate.

The total redress and compensation offered to customers stands at €108m, while one tenth of affected customers have still not received an offer.

As of January 24, the number of customers receiving redress and compensation has increased to more than 5,000, and more than €68m has actually been paid, said Ms McDonagh.

Before the latest Oireachtas hearing, international ratings firm DBRS said that after the Central Bank stepped up its “scrutiny”, late last year, in its two-and-a-half-year probe into the mis-selling of tracker mortgages, that the bill for the banks could top €1bn.

“We estimate that the direct financial cost to banks could rise to, or, even exceed, the €1bn mark if the final number of affected customers were to rise substantially above the c33,700 currently identified, and if the average redress and compensation payments were to remain at elevated levels,” it said.

DBRS estimated that a disproportionate financial burden falls on smaller lenders such as KBC and Permanent TSB, rather than on AIB, Bank of Ireland, or Ulster.

In terms of the number of customers affected at each lender, it said the average compensation works out at €19,947 for Bank of Ireland; €20,208 for AIB; €73,232 for PTSB; €40,350 for KBC; and €60,286 for Ulster.

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