And remember we also bailed out bankers' pension plans
Published 24/08/2014 | 02:30
Finance Minister Michael Noonan was quick last week to welcome the fact that Permanent TSB had made an underlying profit in the first half of the year.
It was the third state-rescued bank to report profits, after AIB and Bank of Ireland.
The turnaround of the bailed-out banks is hardly surprising, given that the apparatus of the State - including the Central Bank - has been used to force ordinary people to pay in multiple ways to restore them to their money-making ways of old.
The Central Bank has abandoned any pretence of consumer protection. Other than issuing warnings about unauthorised financial firms, it does little to support consumers.
Credit unions have been hobbled by over-regulation by the Central Bank, with banks the beneficiaries.
Half of all credit unions have lending restrictions imposed on them, most have been forced to value their offices in a way that makes no sense but forces huge losses on their balance sheets, and many that want to merge have been told by the Central Bank that they cannot.
Then consider the ways banks are going on a consumer-gouging rampage.
Car distributors can offer finance deals at 1.4pc - that's about 10 times lower than banking borrowing rates.
New mortgage rates are obscenely high.
Davy Stockbrokers let the cat out of the bag when it revealed the profit margin on new lending at AIB and Bank of Ireland is 300 basis points. In other words, the banks get funds at 1.5pc and lend out at 4.5pc, making a profit of €300 a month on every €200,000 lent out.
The super-normal profits being made on new lending have been calculated at €1bn a year, by Brendan Burgess of Askaboutmoney.com.
Existing mortgage holders on variable rates are paying around €350 a month more on a €200,000 mortgage than someone on a same-sized tracker.
Excuses for high variable rates are rapidly disappearing. Rates paid on new deposits have fallen to just 0.65pc, and banks no longer have to pay for the guarantee.
Banks are also guilty of outsourcing their arrears resolution work to lawyers, deliberately dealing with those in mortgage distress in a slow and unreasonable way.
Small firms are struggling with banks' reluctance to support them, consumer current account charges have risen to unfair levels, and branches are increasingly unwelcome places as bankers try to force us to do the work for them online, and then charge us handsomely.
Let's not forget that we bailed out the pension scheme of AIB bankers, past and present, by allowing the bank to use bank assets to prop up its generous scheme.
Would the other two banks still have pension schemes if we did not bail them out?
We are some mugs.
Sunday Indo Business