In a series of written responses to questions posed by members of the committee and seen by the Irish Examiner, Mr Duffy says the lowest mortgage product that AIB offers is a 3.5% one-year fixed term. The most expensive is the 4.49% standard variable rate, although this has been reduced by 0.25%.
The bank was in a position to introduce a 0.25% cut because of its improved underlying performance and its reduced cost of funding, he says. Moreover, rates are kept under constant review.
AIB’s cost of funding was 1.64% at the end of June, when the 99.8% state-owned bank had taken possession of 410 properties. This included 346 owner-occupied homes and 64 buy-to-let houses. These were mostly voluntary surrenders.
By the end of September, a total of 4,620 legal letters had been issued to mortgage arrears customers. A total of 1,770 court proceedings had been concluded; a further 3,022 had a court date scheduled; in 375 cases, an order had been obtained; and 49 orders had been executed for repossession of a property.
A total of 15,276 mortgage resolution offers had been made and 8,473 had been concluded by the end of September. Both of these exceed the Central Bank targets.
In the buy-to-let sector, 6,380 offers had been made to mortgage arrears customers by the end of September and 2,429 of these had been concluded. Legal proceedings against buy-to-let customers had resulted in an order executed and property in stock in 966 cases by the end of September. So far, 1,500 rent receivers have been appointed.
One third of the bank’s total mortgage book is in the form of loss-making tracker mortgages. AIB is not in any discussions to sell these to the ECB. It launched a switching product to enable customers on trackers to move home and retain the mortgage product plus an added 1%. However, the take up has so far “been minimal”.
At the end of June, the volume of SME loans outstanding was €13.7bn. The total volume of impaired loans was €4.4bn and the level of loan loss provision coverage was 66%.
Mr Duffy says AIB had not yet made a submission to the Central Bank about the new lending rules, nor had it received any requests to contribute to the costs of the Oireachtas Banking Inquiry.