The AIB Group chief executive has insisted the bank’s part in the industry-wide €1bn tracker mortgage scandal was accidental and was not a consequence of any deliberate policy on behalf of the lender, writes Eamon Quinn.
At the Oireachtas Finance Committee, chief executive Bernard Byrne said the bank had not made a submission to gardaí over its overcharging customers on tracker mortgages.
He told TDs and senators a total of 9,348 of its customers had been identified and will receive some sort of compensation and redress.
But over half of the customers have yet to be paid although the bank said it aims to have contacted all customers in the next few months and to have concluded the process by the summer.
Late last year, the bank admitted that 4,000 more of AIB and EBS customers were involved, as part of a continuing Central Bank probe into the scandal.
These 4,000 customers, who were not on trackers but had a right to do so, will receive €1,000 compensation and €615 for advisory fees, Mr Byrne said.
AIB Group looks set to stick to the €190m it has set aside for its part in the scandal, despite the late addition of the 4,000 additional customers.
The Oireachtas hearing was the latest to be held into the scandal. The total bill in compensation and redress across all banks will likely reach €1bn.
Mr Byrne said the consequences of the bank 10 years ago ending trackers hadn’t been thought through and were “unforeseen” because “certain customers” previously on tracker rates “were not able to revert to the tracker product”.
“It is clear that the potential fallout of the decision to stop offering the tracker product to new customers was not considered in terms of how existing customers might be impacted in the future as some of these customers had a right to revert to a tracker. This clearly should not have happened,” he said.
TDs said that they did not believe that AIB and other banks did not know what was happening 10 years ago.
Sinn Féin finance spokesperson Pearse Doherty said he didn’t think the public would “swallow” the explanations. Fianna Fáil spokesperson Michael McGrath asked the bank to provide redacted contracts the bank had struck with customers.