Home > Financial > AIB makes €300m provision for mortgage tracker redress

AIB makes €300m provision for mortgage tracker redress

Written by Business World, on 4th Feb 2020. Posted in Financial

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 Allied Irish Banks has set aside a further 300 million euros to cover possible compensation owed to customers caught up in Ireland's mortgage tracker scandal.

In a statement on Tuesday, the bank's board said it had set aside the sum after acknowledging that "redress may be due to a previously identified group of customers who had an option of a prevailing tracker rate".

More than 40,000 homeowners have been compensated by banks in recent years after regulators discovered mortgage lenders had systemically overcharged on home loans that should have been switched to cheaper rates.

AIB said it was in discussions with Ireland's Central Bank with regard to potential appropriate treatment of this group of customers.

By the end of June last year, AIB had set aside 272 million euros to cover the cost of the tracker mortgage redress since the examination began in 2015 and said the process was materially complete.

The 300 million euro provision will be taken in the bank's 2019 financial results, it said.

In Tuesday's statement, AIB also announced that it expects to propose an ordinary dividend in line with its range of between 40-60% of attributable earnings, subject to regulatory approval.

The bank said its CET1 capital ratio - a measure of financial strength - was in excess of 16% at 31 December 2019. (Reuters)

Source: www.businessworld.ie

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