KBC announce provision of €54.5m to deal with tracker mortgage scandal

KBC Bank has announced that a provision of €54.5m has been set aside to deal with the tracker mortgage scandal.

It is thought more than 1,600 customers were overcharged or wrongly denied a tracker rate.

This is in addition to the initial amount of €4.4m which was announced this time last year.

KBC’s Chief Executive has again apologised for the controversy and says compensation payments for those affected has begun.

"Of course, like all banks we are very focused on managing the ongoing Tracker Mortgage examination and apologise sincerely for the errors that occurred at the bank before 2009," Wim Verbraeken, Chief Executive, KBC Bank Ireland said.

"We have begun payments to affected customers and conclusion of the Tracker Mortgage Review continues to receive the highest priority at KBC.”

The bank is continuing to engage with the Central Bank in relation to the identification of impacted customers and it is expected that this identification process will conclude by the end of this year for the vast majority of impacted customers.

All customers who have been identified so far have been or are in the process of being contacted individually and redress and compensation payments have commenced.

Finance Minister Paschal Donohoe has made it clear that unless the issue is dealt with comprehensively over the next six months that there could be serious sanctions for individual managers and directors.

Earlier this week, Deputy Governor of the Central Bank Ed Sibley strongly criticised the banks and stated that they would not only be investigating the banks but the actions of senior personnel, management and board members in the banks.

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