By Pádraig Hoare
Nearly 2,500 tracker mortgage customers of KBC Ireland remain on the wrong rate since the €1bn scandal was uncovered, its chief executive has said.
Wim Verbraeken was told by one TD at the Oireachtas finance committee that his bank took “main prize” for unacceptable delays in redressing and compensating customers. Sinn Féin’s Pearse Doherty said: “Your bank is the worst.”
There were more harsh words for Mr Verbraeken as members tore into banking practices for more than four hours over two sittings, with Permanent TSB bosses hauled over the coals first, followed by KBC Ireland.
KBC Ireland is seen by many experts as one of the biggest sinners of the scandal, considering its smaller market share in mortgages in Ireland compared to the other “big five” banks. It has approximately 3,000 affected.
PTSB said 21 properties were lost, including seven family homes. KBC Ireland said six family homes and 27 buy-to-let properties were lost. Mr Verbraeken said he expects the six family homes lost so far to rise, while Permanent TSB admitted seven family homes have been lost from the fallout of the tracker scandal.
PTSB chief Jeremy Masding and KBC’s Mr Verbraeken and their officials came under fire from TDs and senators at the committee, having to deny repeated accusations they had learned nothing from the industry-wide scandal, which is set to cost banks up to €1bn in redressing customers for money wrongly taken, as well as compensation.
The tracker fiasco occurred when almost customers were wrongly put on more expensive loans by 15 lenders, including the five biggest in Ireland.
The Central Bank is conducting a review of 2m mortgages, with almost 34,000 customers now identified as affected, including dozens who lost their homes under many lenders.
Permanent TSB said just under 2,000 had been impacted, while KBC Ireland said just under 3,000 were.
Mr Masding was told by committee chairman John McGuinness he was “the best company man I have seen here” for defending PTSB’s strategy in dealing with affected customers, but that it did nothing to look out for them. “You should be ashamed of yourselves, the lot of you. I wouldn’t give you a bank licence,” he said.
Mr Masding denied the suggestion that putting one of its members on one of the tracker appeal panels for customers was unfair.
Fianna Fáil’s Michael McGrath suggested putting one of its members on the appeals panel was akin to a defendant on trial being put on a jury. Mr Masding retorted that it was acknowledged by the other figures on the panel that its bank member was fair and objective.
Some 28% of customer appeals have been upheld by the PTSB tracker appeals panel.
He defended his handling of the bank’s response to the scandal, saying he felt his “conduct was becoming” of what was expected of a chief executive of Permanent TSB.
Both Mr Masding and Mr Verbraeken again apologised for the their bank’s part in the tracker scandal, but both said there was no evidence to suggest it was done deliberately to overcharge customers.
International ratings firm DBRS said it expects the final bill to be €1bn, and that this amount could rise if the 33,700 affected customers rises again once the Central Bank completes its review.
It said average compensation works out at €19,947 for Bank of Ireland; at €20,208 for AIB; at €73,232 for PTSB; at €40,350 for KBC; and at €60,286 for Ulster.