The Central Bank has hired criminal lawyers to help it prepare any documentation that could be passed on to the Garda for investigation, as the regulator pursues enforcement actions against banks as part of an examination of the country's tracker-mortgage scandal.
Ireland’s five main banks, which account for more than 99 per cent of all identified tracker overcharging cases in an industry-wide problem, have so far signalled the controversy will cost up to €890 million to resolve. However, analysts estimate the final figure may exceed €1 billion.
Two years after the Central Bank ordered banks to find borrowers who were either denied a low-cost mortgage linked to European Central Bank rates or put on the wrong rate entirely, the regulator revealed this week that the number of identified impacted customers had grown by 13,600 to 33,700 since September.
AIB identified a further 5,250 cases, bringing its total to 9,402. The lender had previously set aside €190 million for refunds. However, Investec analyst Owen Callan estimates that AIB may have to set aside as much as a further €60 million.
Identified customers
KBC Bank Ireland said this week that it will more than double its tracker provisions to €120.3 million as its number of cases rises to 3,545 from a previous upper limit of 1,661.
Permanent TSB, which has either compensated or offered money to all 1,980 of its identified customers, had set aside €145 million two years ago to draw a line under the problem, while Bank of Ireland revealed last month that it its level of provisioning would rise from €25 million to as high as €200 million.
Meanwhile, Ulster Bank, which booked a €211 million charge last year for the tracker controversy, is understood to be set to increase its existing 3,500 number of acknowledged cases by as much as 2,000 to 3,000.
Mr Callan estimates that Ulster Bank, a unit of Royal Bank of Scotland, may have to increase its provisioning by as much as €100 million to €180 million if the customers were entitled to a tracker mortgage as far back as 2008.
Sources confirmed a report on Thursday that the Central Bank has engaged criminal lawyers, including barrister Paul Anthony McDermott, to see whether cases can be taken against individuals as a result of the tracker controversy. Gardaí have not started an investigation, although the force has been briefed by Central Bank officials on their work.
The Central Bank plans to complete enforcement investigations against all the State’s main banks before a line is drawn under the issue. This could result in fines of up to €5 million for a firm and €500,000 against individuals.
