Finance Minister should make the AIB Board accountable for the Prevailing Tracker scandal at the forthcoming AIB AGM

Brendan Burgess

Text of a press release I am circulating today.

Consumer advocate, Brendan Burgess, today called on the Minister for Finance, Paschal Donohoe, to vote against the reappointment of some of AIB’s directors at the forthcoming AGM. The Minister owns 75% of the shares in AIB so his vote would result in these directors being ejected from the board.

Burgess, who led the AIB Prevailing Tracker Rate campaign which resulted in 6,000 people getting compensated for AIB’s failure to offer them a tracker in accordance with their contract, said that the Minister has repeatedly expressed his disapproval of the manner in which the banks have handled the tracker issue and has called for individual accountability. In fact, he has said that he is working on legislation to bring in a Senior Accountability Regime (SEAR) for bankers.

But these are empty words, if he does not back them up by making the directors of AIB accountable for the way they treated the Prevailing Rate customers who had to go to the Ombudsman to get AIB to recognise their breach of contract.

This was the single largest tracker redress issue involving payments of €300m to 6,000 borrowers who had been denied trackers.

AIB’s defence was baseless, contradictory, and confused.

“We should have offered you a tracker, but it was not a breach of contract, it was a service failure.”

“Even if we had offered you a tracker, it would have been at a rate of 12% so you did not lose out”

“The method we used in 2017 to determine what the rate would have been in 2010 is commercially sensitive.”

“But we got a top international firm of banking consultants to verify that the rate would indeed have been 12%.”

“The report is confidential so you can’t see it and we can’t tell you who the consultants who wrote it were.”

This defence would have been comical, if it had not caused such hardship to their customers. The board of AIB was chancing their arm in an effort to save the bank €300m at the expense of their customers.

The board should have admitted early on that they had breached the contract by not offering these customers tracker mortgages and should have engaged with them to resolve the problem instead of forcing their customers to endure a further 5 years of financial hardship.

Three of the candidates standing for re-election have been directors since then – Helen Normoyle was appointed in 2015 with Brendan McDonagh and Carolan Lennon appointed in 2016. These directors should have challenged the group think which deprived 6,000 citizens of their tracker mortgages. They didn’t, so the Minister for Finance should vote against their reappointment.

Brendan Burgess

The Labour Party has just issued a statement on the matter

Minister’s commitment to accountability in banking should see heads roll at AIB AGM​

5 May 2021​

Statement by Ged Nash TD
Spokesperson on Finance, Public Expenditure and Reform
  • Minister Donohoe must veto reappointment of AIB non-executive directors over bank’s handling of tracker scandal
  • Majority State-owned bank must show lessons have been learned over trackers
  • AIB had single biggest tracker redress issues involving payments of €300m to 6,000 borrowers who were wrongly denied trackers.