Cost of tracker mortgage scandal may reach €500m
Banks still have to identify thousands of impacted accounts which will push the cost of resolving issue higher
The cost of resolving the on-going tracker mortgage issue may reach as much as €500 million, Investec said this morning, as there is likely to be a “material increase” on the 13,000 or so impacted borrowers already identified.
Yesterday the Central Bank disclosed that just 25 per cent of customers impacted by the tracker mortgage scandal have received redress and compensation. Some €120 million had been provided to about 3,300 customers by end-September 2017, in addition to redress and compensation of about €43 million provided by Permanent TSB and Springboard Mortgages.
However, given that the numbers of those affected looks set to rise further, the costs of redressing and compensating affected borrowers is also expected to increase substantially.
The financial regulator said yesterday that the number of accounts affected has jumped by 23 per cent to 13,000, and is expected to rise further, with a figure of as high as 20,000 mentioned. As a result, Investec said that the compensation figure of €163 million is “likely to increase significantly as time goes on, with a € 500m total across the industry not unlikely”.
Owen Callan analyst with Investec, said that provisioning at Permanent TSB, AIB and Bank of Ireland “remains adequate” to deal with these issues, although he expressed concern about Ulster Bank. The lender has both significantly increased the number of identified cases (3,500 now, an increase on the 2,000 or so identified previously), and warned of delays in dealing with them.
Moreover, Mr Callan noted that KBC Ireland has still not provided data to the regulator on the number of impacted accounts they will need to deal with, while it is also unclear just what progress has been made in identifying cases at the now defunct Irish Nationwide Building Society.
“As such, there is likely to be a material increase on the 13,000 cases identified across the Irish banking system,” he said.
If you are having issues with regard to the tracker mortgage scandal and would like some assistance then please don’t hesitate to get in contact with Fin at email@example.com or phone: Dublin 01 6854458 Cork 021 4204122 Galway 091 782181.