Minister should veto re-appointment of AIB non-executive directors over tracker mortgage scandal

26 April 2020

• Minister for Finance should veto the appointment of Non-Executive Directors of bank, who appear to have never questioned the handling of the tracker mortgage scandal

• Government must use its influence as major shareholder to pass on lower ECB interest rates to both personal and business customers

Ahead of the AIB AGM on April 29th, Labour spokesperson on Employment Affairs and Social Protection, Ged Nash TD, has called on the Minister for Finance to veto the re-appointment of non-executive directors of AIB over the tracker mortgage scandal.

Deputy Nash said:

“Last week, AIB accepted the decision of the Financial Services and Pensions Ombudsman relating to the tracker mortgage scandal.

“Yet the nearly 6,000 customers affected were forced to wait four years for AIB to finally face up to their wrongdoing, instead of offering due redress.

“Let’s not forget, AIB is 71% owned by the Government after the Irish taxpayer bailed them out to the tune of €20 billion. It puts into context the appalling action of AIB in this case.

“The Minister for Finance – as the majority stakeholder on behalf of the Irish people – must lay-down a marker ahead of the AIB AGM which takes place on the 29th April and make it clear that those who sat silently throughout this scandal must be held to account. Those non-executive directors on the AIB board should not be re-appointed.

“More generally, the Irish Government holds significant shareholdings in both Permanent TSB (75%) and Bank of Ireland (14%), and the Minister for Finance should be bringing this reality to bear and exert his power as a stakeholder to ensure the best interests of the public are served throughout this COVID-19 crisis.

“For instance, the most recent Central Bank figures show that mortgage rates stood at 2.91% – more than double the euro area average of 1.35%.

“When compared with the Eurozone average, this is costing mortgage holders more than €236 extra every month on a €300,000 mortgage over 30 years – or over €85,000 in total.

“Likewise, loans to small business are almost double the EU average, and we have only seen a marginal reduction in interest rates as part of the COVID-19 related business loans announced by the Government.

“With current ECB rates, the banks could lend at 1% and still make a profit, while putting money back in ordinary people’s pockets and pumping billions into the real economy when it is needed most.

“I am calling on the Minister for Finance to use his power to ensure the banks pass on this lower interest rates to mortgage holders and businesses to support them throughout this crisis.”

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