Eire’s AIB fined €83mn over tracker mortgage scandal

Eire’s central financial institution has fined AIB, the nation’s second-biggest lender, €83.3mn over its failure to present prospects entry to low-cost mortgage rates of interest in a scandal stretching again greater than a decade.

The penalty for AIB dwarfed the €38mn Ulster Financial institution was fined final 12 months for overcharging for mortgages after tens of hundreds of Irish prospects at main banks have been denied loans whose charges tracked these of the European Central Financial institution.

AIB had put aside €70mn for a nice.

The tracker mortgage scandal additional dented the status of Irish banks, which needed to be bailed out through the monetary disaster. Tracker mortgages grew to become unprofitable for Irish banks after the ECB’s rates of interest fell near zero on the finish of 2011.

In consequence, Irish banks switched 40,000 prospects to dearer rates of interest, together with fastened or variable charge loans. The central financial institution started an investigation in 2015.

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The AIB sanction brings to €174mn the quantity banks have been fined over tracker mortgage failings, the central financial institution stated in an announcement. The lenders have themselves paid €737mn to prospects in redress and compensation.

After AIB’s sanction, Eire’s greatest lender, Financial institution of Eire, continues to be to obtain a penalty.