Friday 24 February 2017

I will refuse Noonan's calls for cheaper mortgages - PTSB boss

Thomas Molloy

Thomas Molloy

Permanent TSB boss Jeremy Masding told the Dáil yesterday that he will reject any political requests to cut borrowing costs for customers on expensive variable mortgages
Permanent TSB boss Jeremy Masding told the Dáil yesterday that he will reject any political requests to cut borrowing costs for customers on expensive variable mortgages

Permanent TSB boss Jeremy Masding told the Dáil yesterday that he will reject any political requests to cut borrowing costs for customers on expensive variable mortgages.

Asked directly whether he would refuse a request from Finance Minister Michael Noonan, the bank chief executive replied; "Yes; but not bluntly." He added that he'd tell Mr Noonan that he'd "prefer if you didn't ask me questions about the running of my organisation".

The remarks to the Oireachtas finance committee put Permanent TSB on a collision course with Mr Noonan and Taoiseach Enda Kenny, who have promised to demand cuts to variable mortgages.

The chief executives of Bank of Ireland and Ulster have also said they would not listen to Mr Noonan, although AIB boss David Duffy seemed to suggest he would. AIB is almost 100pc owned by the State. Permanent TSB is 75pc owned by the State while other lenders such as Ulster Bank are independent. Permanent TSB was controlled by the State but has recently sold a stake on the stock exchange.

Mr Masding again dashed hopes he might soon decide to cut borrowing costs for his existing customers with variable mortgages. He rejected repeated suggestions from TDs and senators who said that Permanent TSB was in a position to stop charging customers more than 40 times what it costs the bank to borrow from the European Central Bank.

The chief executive dismissed the argument about low borrowing costs, saying the bank only borrows 15pc of its funds from the ECB. It borrowed more than half during the crisis.

He also told TDs and senators that new customers may get cheaper mortgages than existing customers because the markets regard the new borrowers as a lower risk. Questioned about whether Permanent TSB could lose good customers who pay their mortgages to a cheaper competitor, Mr Masding said "we are spending a lot of time reflecting on this issue" and said the bank was "developing a strategy".

Following criticism on how the bank is dealing with certain customers in arrears, Mr Masding repeatedly invited TDs and senators to send him details of the individuals who were encountering problems with Permanent TSB's call centres.

Irish Independent

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