AIB defends relief given to mortgage holders

State-owned Allied Irish Bank has defended relief given to mortgage holders and said its customer base is growing and that it is dropping interest rates.

AIB defends relief given to mortgage holders

AIB’s director of retail and business banking, Bernard Byrne, made the comments after the bank’s top officials met with Finance Minister Michael Noonan yesterday over calls for mortgage rate cuts.

Mr Noonan has called in the heads of the main banks for talks amid concern that up to 300,000 variable mortgage holders are paying higher rates compared to the eurozone average.

The Government has already signalled that extra powers could be given to the Central Bank to force banks to alter their rates or fresh levies could be slapped on lenders.

Mr Byrne said AIB had cut rates twice in the past six months. He also said the 99%-State-owned lender had seen its share of the mortgage market increase by 6%.

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AIB has cut variable rates by 0.25% and 0.38% for EBS and Haven SVR customers – changes which which come into effect next month. But the Government want rates reduced more.

The Coalition has faced pressure in recent weeks to intervene but there is also concern this could scare away new lenders entering the market.

Mr Byrne said the talks were “constructive”.

Mr Noonan also met Ulster Bank CEO Jim Brown yesterday, as well as top officials with ACC Bank. Neither made comments after the meetings.

Bank of Ireland chief executive Richie Boucher will meet him tomorrow, while Permanent TSB CEO Jeremy Masding will also meet the minister this week.

Central Bank research on the difference in rates charged and what it costs the banks will then be published on Thursday.

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