Michael McGrath
Can we have an update on the tracker mortgage review
McLoughlin:
602 customers who were entitled who were not on a tracker mortgage
But it's not complete
3500 -3900 with margin errors of up to 15 bps
We have put all customers back on the right rate.
We will be contacting them over the coming months with compensation
Our focus has been on getting them back on the right rate.
McGrath: The number may change? Yes.
When do you expect to pay compensation:
McLoughlin: Hopefully before Christmas
McGrath: What is the model?
McLoughlin
We did a huge review in 2010 - around 5,100 customers were addressed. (2100 were given trackers back, 3,000 who came off fixed rates were put on trackers)
How much:
McLoughlin: We have provided for €25 m.
[BB: an average of €42k per customer]
McGrath : what about the staff
McLoughlin: Still in discussion with the Regulator. No decision made.
Mortgage Rates
Cost of funds 41 basis points
Do we have figures for the other costs .
McLoughlin: Not for the mortgage book in particular
McGRath: Then how do you do your pricing of mortgages? [Great question]
McLoughlin: It's not in the public domain
McGrath; 27% are on SVR [ I think that is for the LTVs as well]
What can a customer of >80% LTV do? Can they fix?
If they are in Negative EQuity
McLoughlin: Yes they can
McGRath - so they can fix on 3.3% for two years?
McLouglin : Yes.
McGrath: Why don't you just compete on rates and get rid of the cash back gimmicks?
McLoughlin: Our customers, especially FTBs like them.
It brings down the initial costs - legal costs
People think that they are tied in on the fixed rate
Customers can overpay by 10% month
They can port the mortgage to a new home
We have built in flexible options into our
Some have split their mortgages in variable, 3 years fixed, and 5 years fixed.
McGrath: Why don't you have 50% LTV rates for fixed rates. At the moment, it's only > or < 80%.
McLoughlin: For simplicity
McGrath: If someone reduces their LTV band, can they move to the lower band
McLoughlin: Yes, if they submit an up to date valuation.
McGrath: I would like to acknowledge the Workbench initiative and the Enterprise Weeks