Bank of Ireland  

Bank of Ireland sets £150m aside for mortgage scandal

Bank of Ireland sets £150m aside for mortgage scandal

Bank of Ireland is setting aside 170m euros (£150m) for investigations into its tracker mortgage rates.

The bank, which reported its full-year results today (26 February) which included the 170m euros figure, had warned last November the cost of compensating customers could be as high as 200m euros (£175m).

Compensation payments by the bank follows an investigation by the Irish Government in 2015 into the Irish tracker mortgage market.

The probe revealed nearly 10,000 Bank of Ireland customers were unfairly denied tracker mortgages or put on the wrong rates. Of the 9,400 customers, 3,400 were on an incorrect tracker, while 6,000 were denied a tracker rate.

In a number of extreme cases, customers lost the ownership of their homes or properties directly as a result of the bank’s actions.

In January this year, chief executive Francesca McDonagh said the bank had paid out 68m euros to 5,000 customers.

The bank, which provides the Post Office and AA with financial products and services, said it is resuming paying dividends, and is proposing a payment to shareholders of 11.5 cents per share (9p).

It reported an underlying profit of over 1bn euros (£870m), flat on the year before, but brought down to 872m euros (£765m) due to the money set aside for compensation to tracker mortgage customers.

The bank, which was bailed out during the credit crunch by the Irish Government, said the dividend payout - the first in ten years - is a ‘significant milestone.