100pc mortgages were 'not a good move' - former finance director of Ulster Bank
The introduction of 100pc mortgages was “not a good move” a former finance director of Ulster Bank has told the Banking Inquiry.
Michael Torpey denied, however, that his bank was responsible for bringing this product to the market and driving it.
He said it had been available in a number of institutions at the time “on a case by case basis” before it became publicly available.
Mr Torpey said the housing market at the time was “extremely competitive” and this was one of a range of products introduced to increase market share.
“With the benefit of hindsight it would have been better if it was not introduced”, he added.
He told Deputy John Paul Phelan that 100pc mortgages were just one element in a range of incentives “of one sort or another” to encourage people to buy houses.
The product did contribute to the overheating of the market but was only one element.
It “didn’t move the dial in any dramatic fashion but it was not a good move to make with the benefit of hindsight.”
Neither Mr Torpey nor Mr Robert Gallagher, former executive at Ulster Bank, would be drawn on the bank’s loan to property developer Sean Dunne for the Jury’s/Berkeley Court site in Dublin in 2005.
Mr Torpey said as financial director he had no part to play in these matters and would have no knowledge of individual customers, their loan applications or the credit decisions which would come before a credit committee.
Mr Gallagher said at the time of sale and purchase of that asset he was not with Ulster Bank and could not comment.
Mr Gallagher described how after the night of the Bank Guarantee on September 29th 2008, the fact that it did not include Ulster Bank had resulted in an outflow of deposits from the bank worth about €4bn in the month following.
He said Ulster Bank was not aware of the government decision until it was announced the following day and both the board of UB and the parent company Royal Bank of Scotland proactively sought to have Ulster Bank included but this had not happened.