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AIB setting aside €300 million redress for 'previously identified' tracker mortgage victims

The Central Bank said last year that lenders had already paid €683 million in redress to impacted customers.

Image: Sam Boal/Rollingnews.ie

Updated Feb 4th 2020, 8:42 AM

AIB HAS SAID this morning that it has created a provision of €300 million within its 2019 financial results for a group of people affected by the tracker mortgage scandal.

Sinn Féin’s finance spokesperson Pearse Doherty welcomed the move as showing that the “penny has finally dropped with AIB”. 

The tracker mortgage controversy saw tens of thousands of customers being overcharged by their lenders when they were either denied a tracker rate they were entitled to, or charged the wrong rate of interest on their mortgage.

In its final report on its examination of the scandal last July, the Central Bank said lenders had paid €683 million in redress and compensation to impacted customers

There were 99 homes lost as a result of lenders’ failings as well as 216 buy-to-let properties, according to that report.

In a statement this morning, AIB said it was setting up the extra redress fund following a preliminary decision issued by the Financial Services and Pensions Ombudsman.

“The board understands that redress may be due to a previously identified group of customers who had an option of a prevailing tracker rate,” the bank said. 

“The board recognises that there is a range of possible outcomes and has created a provision of €300 million which will be taken in full year 2019 financial results.”

AIB added that it recognises it’s in the interests of the bank, its customers and other stakeholders to “bring this matter to a resolution” and discussions were ongoing with the Central Bank regarding the “potential appropriate treatment of this group of customers”.

The bank will announce its full year 2019 results on 6 March.

Sinn Féin’s Doherty said: “If it wasn’t for the fact that customers who went through the independent appeals process refused to accept the decision of AIB and took their cases to the Financial Services Ombudsman, then this would not have happened so I want to commend those who have done so this morning.

I am calling on AIB to now clarify that they will settle with all of their affected customers and that they will do so in a speedily manner. The other banks involved need to immediately follow suit.

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Sean Murray

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