Kenny refuses to intervene in AIB mortgage hike, says bank must be profitable

The Taoiseach has said he will not direct AIB not to increase mortgage rates, because the bank has to return to profitability.

The bank announced a 0.5% hike in rates last week, the second in a matter of months.

Fianna Fáil leader Micheál Martin said the Government's refusal to act showed they had "abandoned" mortgage holders.

Enda Kenny said however, that the bank needed to be able to stand on its own two feet.

"This is a commercial decision by Allied Irish Bank," he said. "Yes, it is difficult and challenging for people on variable-rate mortgages, but it is necessary that this bank to get back to profitability.

"If that's not to be the case, the State will have to continue to recapitalise the banks."