BoI chief: Bank has no policy to block mortgages over Covid-19

Francesca McDonagh tells Oireachtas finance committee her bank isn't seeing many complaints from prospective borrowers
BoI chief: Bank has no policy to block mortgages over Covid-19

Francesca McDonagh, group chief executive of Bank of Ireland, also defended the bank's plan to close 103 branches on the island of Ireland, saying post offices north and south would play a role in serving affected customers. Picture: Naoise Culhane

Bank of Ireland chief Francesca McDonagh has said that the lender has no blanket policy to turn away mortgage applicants on the basis of any underlying health conditions that may make people vulnerable to Covid-19.

She was not seeing any "material volume of complaints or cases" to suggest that borrowers were unable to get mortgages after failing to secure life assurance cover due to an underlying condition such as diabetes under Covid-19, Ms McDonagh told Sinn Féin finance spokesperson Pearse Doherty at the Oireachtas finance committee.

Life cover applications postponed

Since the onset of the Covid crisis a year ago, New Ireland Assurance, which is owned by Bank of Ireland, and other life assurance firms have told their broker-sellers that applications for life cover from a life insurance applicant testing positive or who is waiting for a Covid test will be postponed. 

Mortgage lenders require a life policy for borrowers to draw down mortgage loans.            

However, Ms McDonagh said that although Bank of Ireland does require life cover for applicants to secure a mortgage loan that she was not aware of specific cases. 

Bank of Ireland was also advancing an outsized share of home loans compared with its overall share of the home loans market, she told the committee.  

Case-by-case assessment

Ms McDonagh said that applicants for loans who were tapping some sort of Government income support during the Covid crisis in a sector temporarily affected by the lockdown would be assessed on a case-by-case basis.

Labour Party finance spokesperson Ged Nash said he suspected that banks were using the Revenue list of companies tapping Government wage-subsidy schemes "to blackball" employees from those companies applying for mortgage loans.      

On bank closures, Ms McDonagh said that Bank of Ireland has not closed branches just because of the fall-off in footfall during the Covid pandemic in the past year.

She said that the closure of around a third of its branch network was "inescapable" and "appropriate" given the long-term shift to online banking.

Post offices to play key role

The tie-up with An Post and an existing post office link in the North would help customers when its branches earmarked for closure start closing their doors from September, Ms McDonagh said.  

Asked by Fianna Fáil TD Jim O'Callaghan if the bank's logic of closing branches as footfall fell with the increase of online transactions pointed to the closure of all of its branches, Ms McDonagh said she was not predicting a no-branch banking future.                  

Ahead of the hearing, the Financial Services Union said the bank should think again about the closures.

The bank earlier this month unveiled plans to close over 100 branches across Ireland, marking a major shrinkage of its network and another sign of the troubles facing the Irish banking industry.

Bank of Ireland has one of the largest branch networks across Ireland, and the planned closures represent a major shrinkage of the 257 branches it has in the Republic and the 28 it has in the North.

It said it will cut 88 branches and keep 169 branches open in the Republic and close 15 branches and keep 13 open in the North.


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