Saturday 19 October 2019

KBC Bank: We will learn lessons from tracker mortgage scandal

KBC Bank Ireland
KBC Bank Ireland

Personal Finance Editor

KBC Bank has apologised for the tracker loss cases at the bank and committed to learning the lessons from the scandal.

More than 3,700 customer accounts have been impacted.

The bank told members of the Oireachtas Finance Committee the tracker probe is a top priority for it.

New chief executive Peter Roebben said KBC was determined to right the wrongs experienced by its customers.

He said he did not expect the numbers of customers impacted by the tracker-loss scandal to rise.

The €1bn tracker scandal blew up at 15 lenders as banks did not allow people who originally had a tracker to return to the attractive rate after being on a fixed rate for a period, or did not make it clear to customers what they would lose by signing off on a tracker.

Mr Roebben told the committee: “We would like to again acknowledge our errors in relation to the administration of tracker mortgages and can I, as a newly appointed CEO, add my sincerest apologies, to that of my predecessors, to those affected.

“Can I also publicly commit us to taking on board the lessons learned on behalf of our customers.”

The bank said 96pc of customers impacted by the tracker issue at the bank have now received full redress and compensation.

Paying refunds and compensation has cost the bank €120m. This is way up from the €4.4m the bank had set aside in 2016 to cover the cost of tracker redress.

At the start of the year the bank identified 661 extra cases of people wrongly denied tracker mortgages.

There are no further customers impacted by a loss of a tracker, subject to discussion between the bank and the Central Bank, the bank told the committee, which is chaired by Fianna Fáil TD John McGuinness.

KBC is one of six banks that are expected to be fined by the Central Bank due to their denial of trackers to customers.

Mr Roebben said the bank was a “positive force for choice” in the Irish market.

It was not planning sales of non-performing residential mortgages, with the remainder of residential arrears cases in the bank to be dealt with internally.

Last August the bank sold a €1.9bn portfolio of non-performing loans Goldman Sachs.

“When it comes to the issue of non-performing loans and arrears, I believe that we should continue to tread carefully. We must remain conscious of the vulnerability of those who find themselves in difficulty and behave accordingly.”

The KBC boss said that in around 90pc of its arrears cases borrowers have agreed a resolution option with the bank.

In December, the bank hit headlines when it moved to repossess a farm in Strokestown, Co Roscommon, in a high-profile case that attracted controversy.

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