Bank of Ireland fined record €100m over tracker mortgage scandal

Banks had put aside millions of euro to cover the fines and the costs of compensation and retribution.

Bank of Ireland has been fined a record €100.5m for its involvement with the tracker mortgage scandal.

Bank of Ireland’s failures resulted in the loss of 50 properties, including 25 family homes, which could been avoided said the Central Bank. 

The bank’s failings in respect of 16,000 tracker mortgage customer accounts happened between August 2004 and June 2022. 

The Central Bank said there were six customers impacted by Bank of Ireland tracker mortgage breaches this year. 

“We unreservedly apologise to all customers harmed by the tracker mortgage issue. The impacts were significant and wide reaching, up to and including loss of homes in the most serious of cases,” said Gavin Kelly, interim chief executive of Bank of Ireland Group.

Compensation for the families that lost their homes was a minimum of €50,000. 

The Central Bank’s original fine was €143.6m, which was reduced by 30% to €100.5m in accordance with the settlement discount scheme provided for by the Central Bank. 

This discount was created to incentivise settlement with the banks that were investigated.

This is the largest fine imposed to date by the Central Bank and is in addition to the more than €186.4m Bank of Ireland has already paid to impacted customers identified prior to and as part of the Central Bank’s Tracker Mortgage Examination.

This marks the end of the Central Bank’s seven year long investigation into the tracker scandal across Irish banking.

There is only one inquiry into a single individual's involvement with the tracker scandal. This person worked with Permanent TSB at the time. No one else from the three remaining retail banks in the Republic have been individually sanctioned. 

The regulator has already fined all other banks involved in the industry-wide scandal that had its roots in lenders removing the benefits of trackers from their customers more than a dozen years ago.

Banks had put aside millions of euro to cover the fines and the costs of compensation and retribution.

In June, the Central Bank slapped a record fine of €96.7m on the AIB and its EBS lender over the tracker scandal.

Permanent TSB was the first of the big banking groups to be sanctioned in 2019, under a settlement agreement in which it was fined €21m. Subsequently, KBC Bank was fined €18m and Ulster Bank had to pay €38m, also for dozens of regulatory breaches.

Mortgage industry experts have long questioned a regulatory process that means that senior bankers have escaped personal censure for their part in a scandal that involved in people losing their homes.

Critics have also pointed out that the fines and huge costs linked to the investigation are effectively passed onto customers.

The State has sold its remaining shares in Bank of Ireland, completing the bank's return to private ownership.

The Government stated that it had recovered almost €6.7bn in cash from the sale of its shares, this comes after €4.7bn of taxpayer funds were used to support the bank during the financial crisis.

Bank of Ireland is the first Irish lender to return to private ownership in full since the Government pumped €64bn into the financial system in 2009.