Tracker mortgage scandal: Lenders to outline how cash will be paid back
Banks at the centre of the tracker mortgage scandal are expected to issue a statement outlining their plans for paying compensation in the coming days.
It is understood the institutions hauled before Finance Minister Paschal Donohoe have agreed to issue separate statements confirming the ‘next steps’ to paying the majority of people affected before Christmas.
Mr Donohoe is also due to issue a statement confirming he has broad agreement from the main lenders to speed up the redress scheme.
It is understood that AIB chief executive Bernard Byrne apologised for the bank's role in the scandal following his meeting with Finance Minister Paschal Donohoe today.
Mr Byrne said AIB was confident of making significant progress in relation to the customers who had issues with their tracker mortgages - and said he had outlined the work the bank had undertaken to date.
He said the bank would make a full statement on the issue tomorrow.
Ulster Bank has also apologised for its role in the tracker loan scandal.
CEO Gerry Mallon said he had apologised unequivocally for the bank's mistakes and that his "number one focus is putting this right and that is what we are going to work hard at now".
All the banks are expected to issue detailed statements tomorrow.
However, this deadline is expected to be challenging for both KBC and Bank of Ireland as they are understood to be behind in their efforts to identify affected customers and the amounts of money to be refunded.
Sources say Mr Donohoe told bank bosses he believes they have been “dragging their feet in solving the problem, at real human cost”.
After new Bank of Ireland boss Francesca McDonagh met the minister, the bank would only say: “We had a meeting with the minister and we listened very carefully to what the minister had to say and his concerns.
“We are treating this matter very seriously and we’ll be making a statement in due course.”
After leaving the meeting, KBC Bank chief executive Wim Verbraeken said the minister had conveyed the Government’s grave concerns. He said the bank would make a full statement later this week.
Permanent TSB did not comment on its meeting.
Banks are understood to have explained to Mr Donohoe that it is a massive task to work out the extent of overcharging on each individual account where a tracker product should have been in place.
Each mortgage account has to be reconstituted as if there was a tracker rate in place once the holder had come off a fixed rate.
Some of those affected went into arrears, further complicating the exercise.
Once the overcharged amount and the refund due is worked out, it then has to be verified and confirmed by third-party consultants.
Taoiseach Leo Varadkar yesterday insisted that taxpayers will not be left to foot the bill for the banks’ mistakes.
Fianna Fáil Finance Spokesperson, Michael McGrath has said that those affected by the Tracker Mortgage scandal must be given clarity on when they will receive what they are owed by the banks and that those who facilitated it must be held to account.
Deputy McGrath said that the tracker scandal has further damaged public confidence in the banking sector.
"As part of the current examination, around 13,000 customers have been affected by the banks’ failure to honour the customers’ contractual rights," he said.
"To add insult to injury, many banks have failed to hand back the money owed to their customers. Some are out of pocket to the tune of tens of thousands of euro, leaving many in arrears on their mortgage.
"We need an investigation, led by the Central Bank, to find out whether there was formal or informal coordination across the industry in the handling of tracker related issues.
"We owe it to the customers affected to ensure that they get the compensation they deserve for the trauma and stress they experienced as a result of the banks’ actions," he said.