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THREE BANKERS APPEARED before the Oireachtas Finance Committee in recent days to be grilled on all aspects of their industry.
The bank boss’s answers, in hearings over different days, made headlines for a number of reasons. For instance:
Bank of Ireland’s CEO Richie Boucher, Permanent TSB boss Jeremy Masding, and AIB’s Bernard Byrne were questioned on a range of issues, from their level of lending, to what they are doing to encourage people to save, to how many homes they are selling on to vulture funds.
With unemployment figures falling, tourism figures on the rise and more cranes appearing along the Dublin skyline, the government’s consistent mantra has been that the economy is making headway.
However, recent figures show there were 82,092 mortgages in arrears in June of this year – a stat that indicates that not every citizen is feeling the effects of the recovery.
Bank of Ireland’s CEO Richie Boucher was up first on 16 November.
While a range of issues were discussed, committee chairperson John McGuinness of Fianna Fáil said he could not let the bank boss leave without ensuring he understood the impact the banking crisis had had on the Irish people, particularly those in mortgage arrears.
Boucher told the committee that repossessions were set to increase, with McGuinness commenting that he didn’t feel homeowners were getting a fair deal from the banks.
Below: McGuinness tells Boucher about the level of hardship his bank has placed on homeowner
“I am not spokesperson for the banking sector,” Boucher said.
“We had to make tough choices and some of the choices you would not do in an ideal world,” said the Bank of Ireland boss.
Engage more with mortgage holders
McGuinness said it would be remiss of him not to raise the issue of the impact of the banking crisis with Boucher.
The Fianna Fáil TD called on Bank of Ireland and all banks to engage more with government to solve the issue of the rising number of people presenting as homeless.
You gave them that money in the first place and maybe that money was given on poor grounds, that maybe you have a responsibility, not just to work with them, but to make submissions to government and say to them, ‘look we have cohort of people here who simply can’t repay and we are going to have repossess’ – thus thrusting further numbers onto the housing lists around the country. I actually believe that you have that responsibility…
Said Boucher: “We didn’t give the money to anyone – we lent it…”
McGuinness replied:
“I know you lent it, but if you didn’t get the money from the taxpayer of €4.7 billion you wouldn’t be in business today, we wouldn’t be asking you questions.”
Boucher, again:
“If we didn’t maximise and get back the cash that we owed we would not be able to repay the taxpayer.”
McGuinness:
I understand that Mr Boucher… but there are families right around the country in deep distress, some of them have lost members through suicide due to the whole impact this banking crisis has had on them, and out of that I say you have a responsibility to work with the government.
When asked had he attended any of the court repossession sittings, Boucher said he had, but not for some time.
I have personal experience of where people have lost businesses – my own family experience has that, so it’s not as though I don’t understand and this characterisation that we don’t understand, I don’t agree with, both as a business, as a human being, and as an individual. I have seen what happens, that is why we have the responsibility to lend responsibly.
Below: McGuinness asks Boucher has he been to the repossession court recently?
Permanent TSB boss Jeremy Masding was before the committee on 22 November.
He told the committee that it was seeing “encouraging trends” and that customers were engaging with the bank.
This year the PTSB – which is 75% state-owned – achieved its first group profit since 2007.
Masding used the opportunity to once again apologise to customers for the bank’s failure to apply the correct tracker mortgage rate to 1,372 customer accounts.
The CEO said “repossession is always a last resort” and said it the lender had provided 24,000 long-term restructuring arrangements.
AAA-PBP Paul Murphy grilled the banker on the sale of loans of €481 million to a number of vulture funds.
Masding said the sale was of its “non-core” loans, adding that the bank was “obliged” to sell them.
When asked by Murphy if residential mortgages were included in the sale, Masding said some were commercial loans that were linked to some residential home loans.
Murphy asked the bankers if they knew what had happened to the property owners who had had their mortgages sold on to the vulture funds.
He was told that once a sale goes through the bank isn’t involved in any further transactions between the two parties.
Below: Paul Murphy asks if the bank knows what happened to the 5,500 mortgage holders that were sold on to vulture funds?
Sinn Féin’s Pearse Doherty did not hold back when addressing Masding and his banking colleagues:
I must say, I was listening to your comments earlier on in relation to the tracker mortgage stuff and the rage inside me was getting stronger and stronger because it was being passed off as ‘you didn’t communicate’ or ‘you didn’t perform or give the information that was required, this is an industry-wide issue’.
Like, you talk about the redress scheme to right the wrongs, and you talk again about how you apologise again to your customers – but this wasn’t just an information flaw…
Doherty went on to say the bankers were living on salaries of up to half a million euro.
You watched these individuals lose their homes, you actually took the homes off these people. In my view, this is daylight robbery of their own customers.
The Sinn Féín said when the tracker problem was pointed out to the bank, officials initially denied anything was wrong.
Below: Pearse Doherty says he has ‘rage inside him’ listening to the bankers
Bernard Byrne, CEO of AIB, was before the committee on 24 November.
He told the members that 14 mortgage customers lost their homes after AIB failed to apply the correct tracker rate to their loans.
“We haven’t completed all the work at this stage and it will run into the early part of next year in respect of that programme. Based on the work we’ve done… our best assessment, on what we know in respect of people where the rate was an issue, we may have 14 customers where the home was lost as a result of the rate,” Byrne said.
He said the bank was “well capitalised” and that the outlook for the bank from credit rating agency Moody’s was positive.
Again, chairman McGuinness raised the issue of mortgage holders ending up in the courts, and asked what the bank was doing to prevent people finding themselves in such a scenario.
A lot of TDs and senators have attended these courts, and I have to say, they’re just simply shocking.
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Complex mix of factors? Eh not really, the fact that women take on caring responsibility of children and/or elderly parents, so women either work part time and/or take career breaks and this is not recognised by society or the government as ‘working” so therefore no contributions.
I have taken career breaks and work part time due to the above, I know my pension will be effected but I will always choose my family and their needs, plus I am contributing towards society by providing unpaid care.
I could be dead by the time I can retire!
@Gucky: nail on the head here – my wife chooses to stay home and mind our children (not that we could afford childcare anyway) but I still think we would choose this anyway – all the government does is give you a measly 1500 per year tax credit for this and doesn’t recognize the work that goes into raising and taking care of the family – how about a better tax credit/ tax break for those spouses that want to contribute on their spouses behalf? All they seem to talk about is how they can get women back to “work” – equality should be there for those that choose to work and those that decide to stay at home.
@Gucky: And also the group in the study would have been affected by the Marriage bar – only lifted in the 70′s. Meaning a lot of them would of had to leave work once married, further hampering their potential to work and earn a pension. Horrible to think how they have been treated, forced out of work and also no provisions made to support them.
@Grainne Tallon: good point, I didn’t even think about that. A better analysis would be to analyse the current pension provisions of the current workforce if that’s the demographic that the laws are to effect.
@Sean Baylon: are you seriously saying that those that decide to work should get the same pension as those that decide to stay at home – with your logic the Jobseeker’s Allowance should be same average wage as those that go out to work
@lorcmulv: that isn’t what I said at all – I said that people who’s partners work should be allowed to contribute on their behalf as they are “working” in the home.
@Sean Baylon: 2 people work the same hours and one is specialised and earns 90k but the other 45k. Should they get the same pension? 2 people work different hours one earns 90k and the other 45k. Should they get the same pension? It doesn’t matter about gender or why the person works less hours. Simply some people pay more into their pension.
I’m not at all shocked by this. Women with children tend to not stay in the workforce as long as men over the course of their lives, as such, they get a lesser pension, usually just the state pension. Hardly a groundbreaking story.
So men who worked between 1965 and 2010 earned more pension than women in the same period?! They also earned more income. Women in the same period traditionally stayed home more. How is this news and why is the data 10 years out of date?
But there’s three different categories in retirement isnt there? Men women and politicians.
It is incorrect to conclude that there is no gender variance in the average state pension actually awarded.
The averaging of contributions over lifetime employments does reduce the actual, particularly for women, whose employment contributions are reduced by periods of domestic commitment.
Another factor is involuntary contract employment, whereby the state allowed widespread abuses by employers, to recategorise previously insure able jobs as self employment.
The recent announcement by a lady minister to redress these discriminations is limited in scope by age & records constraints, & does not offer equity universally. Unfortunately, The headline pronouncements do not reveal the continuing limitations to the rectification of these pension reductions.
I work with a number of job sharers who chose to work less hours because they wanted to spend time with their children. They are able to do this because their partners work full time. As a result they will have less pension contributions than their partner. Gender doesn’t come into it they simply earned less in paid employment which was their choice.
Every job sharer I know does no overtime and expect other team members to because they don’t have kids or they have a partner. This is not equality
Don’t have baby’s basically
Women also tend to be much more risk averse when it comes to finances. They are far less likely to invest money, preferring to keep it in deposit accounts – thus becoming poorer over time.
By the way, I’m not saying this is the main cause but it’s a large contributor.
Total household income is a much better indicator of economic well-being!
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