Calls for mortgage cuts puts focus on bank funding

Mounting political pressure on mortgage lenders to cut their standard variable rates could impact funding costs at Permanent TSB more than many other banks, a leading banking analyst has said.

Emer Lang at Davy Stockbrokers said the agreement between Fine Gael and Fianna Fáil in government formation talks to “take all the necessary action to tackle high variable interest rates”, showed pressure was again building on banks to cut their standard mortgage rates.

AIB — which is all but fully-owned by the State — responded robustly to pressure by Finance Minister Michael Noonan last year to implement cuts to its standard variable rate mortgages.