Permanent TSB to raise interest rates

permanent TSB increase Variable Interest Rates

From RTE.ie


Permanent TSB has said it is to increase its standard variable mortgage interest rate by half a percentage point from next Monday.
The move will affect more than 50,000 borrowers, and the bank says that the average monthly mortgage repayment increase will be €14.75.
The bank cited a high cost of funds and tightening margins in the lending market but said its rates remained competitive.
Reacting to the move, the general president of the SIPTU union, Jack O'Connor, said he would write to Finance Minister Brian Lenihan calling on him to withdraw the Government's guarantee from banks which plan to raise interest rates to mortgage holders.
'Apart from the sheer immorality of increasing interest rates it will further exacerbate our overall economic problems, further damaging consumer confidence and reducing consumer demand, thus jeopardising even more jobs in the economy,' he said.
Earlier this week, credit rating agency Fitch downgraded Permanent TSB's parent company Irish Life & Permanent's rating from C to B/C, due to concerns about its profitability over the next two to three years.
The ratings agency said Permanent TSB would probably report a loss this year, and could make another loss in 2010. Fitch said Permanent TSB was suffering from more expensive funding on international markets and could not re-price its loans quickly enough to compensate, resulting in lower revenue from interest.
Spokespeople for Bank of Ireland, Ulster Bank and Halifax said their banks had no plans to increase variable rates at the moment. A spokesperson for KBC Homeloans said the bank kept its rates constantly under review.

Under normal circumstances I wouldn't agree with Jack O'Connor but in this case he is 100% correct. The government are keeping the banks afloat and now they are attempting to take extra money from the pockets of Irish people. If ptsb are allowed get away with this then the other banks will follow suit.
Permanent tsb is a part of the Irish Life Group and this is the company who used €8 billion of depositors funds to bail out Anglo Irish Bank. And the people who allowed this to happen appear to have gotten off scott free (from a legal perspective).

Surely the Minister Brian Linehan has to act??
 
Government should withdraw guarantees - they are a disgrace - but we shouldn't be surprised as banks still seem to be making all the decisions & the government seem unable to do anything
 
This news is unbelieveable so much for the ECB controlling rates .5% is a large hike...
Would it be advisable to fix now or hold of??
 
Re: permanent TSB increase Variable Interest Rates

This is unbelievable by the banks, if the government doesn't act they'll get the brunt of the bad feeling, i think everyone presumes bad behaviour by the banks but if the government don't intervene i'd say the wrath of the people will be focused on the governement. What happened to the government appointees within the banks, they're obviously totally useless!
 
Re: permanent TSB increase Variable Interest Rates

I don't have a problem with it. If Permanent TSB feel like they need to raise rates due to higher funding costs even with the guarantee, then they should do it. If you don't want banks making these types of decisons, nationalise them and let the politicians run the banks. See how long the banks survive.
 
Re: permanent TSB increase Variable Interest Rates

sunny said:
i don't have a problem with it. If permanent tsb feel like they need to raise rates due to higher funding costs even with the guarantee, then they should do it. If you don't want banks making these types of decisons, nationalise them and let the politicians run the banks. See how long the banks survive.
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+1
 
Re: permanent TSB increase Variable Interest Rates

+2

The taxpayer has given enough to these banks......dont want to have to give them even more money because they've been forced to provide mortgages at below cost.
 
You really would have thought that the Banks and Building societies would exhibit some gratitude for the assistance given them by the taxpayers !
Too much to hope for from the Sector whose greed help pave the way for our current difficulties I suppose !
 
Re: permanent TSB increase Variable Interest Rates

Yes i agree aswell.

We dont want to be re-capitalising ILPM aswell!!
 
Kinda saw this coming - there were a couple of articles in the IT a couple of weeks ago talking about banks lending margins on mortgages being less than those in Europe.

I'm fairly certain that the other banks will follow suit in time.
 
As I have pointed out in this thread, these criticisms of the permanent tsb damage the case for nationalising the banks.

As taxpayers, it is in our interest that the banks operate on a profitable basis. They cannot lend money to people at prices less than they pay on deposits.

So, as a taxpayer and effectively the owner of the banks, I am delighted to see them raising interest rates to more sustainable levels.

Brendan
 
Re: permanent TSB increase Variable Interest Rates

I was surprised by the economically illiterate populist drivel from SIPTU...oh, hang on, no I wasn't.
What the hell is a union doing calling on the government to interfere with a bank? Who do they think they are, the opposition?
 
Re: permanent TSB increase Variable Interest Rates

Purple said:
I was surprised by the economically illiterate populist drivel from SIPTU...oh, hang on, no I wasn't.
What the hell is a union doing calling on the government to interfere with a bank? Who do they think they are, the opposition?
Click to expand...

Enda Kenny (The Leader of the Opposition) has called for the same thing.
 
Re: permanent TSB increase Variable Interest Rates

The_Banker said:
Enda Kenny (The Leader of the Opposition) has called for the same thing.
Click to expand...

Every political party is populist in opposition (which, I suppose, is what SIPTU are doing). If Enda was in power he's be singing a different tune.
 
Brendan said:
As taxpayers, it is in our interest that the banks operate on a profitable basis. They cannot lend money to people at prices less than they pay on deposits.

So, as a taxpayer and effectively the owner of the banks, I am delighted to see them raising interest rates to more sustainable levels.

Brendan
Click to expand...

+ 1

It's a mug's game to think we should pump money into the banks to restore solvency and then hinder that process by preventing them from making a profit.

If the banks return to profitability they can repay the taxpayer. Effectively redistributing tax payer money to customers (whilst they may mainly be the same people) with favourable loan terms is not the same as repaying the tax payer.

Let's not forget that Irish mortgage rates are lower than UK and US rates

Another issue in all of this is the bank shareholders. If the banks end up repaying the tax payer injections and tolerating low profits they are being seriously shafted.
 
Entirely agree Brendan.

Go back about 10 years and Banks etc were being lambasted by the Jack O'Connor types for restrictive lending practices and artificially high interest rates.

Then rates came down (ECB etc), Banks went on a lending spree (because money was cheap and we all wanted to buy property)

More recently Banks have been lambasted for poor lending practices and offering cheap money like snuff at a wake.

Now they are being criticised (the Beardies again) because they refuse to continue to lend money at cheap reates, less than the cost that they can access funds. Just because of the Govt guarantee, Jack O'Connor believes that PTSB etc should lend money at a loss.

Will someone please save us from Congress economics. According to Jack if we double everybodys wages there will be more to spend in the economy and our problems will be solved. Simple.........

Conan
 
Re: permanent TSB increase Variable Interest Rates

Fianna Fail TD Frank Fahy was on the radio and is 'adamant they will not get away with it'.
 
Conan said:
Will someone please save us from Congress economics. According to Jack if we double everybodys wages there will be more to spend in the economy and our problems will be solved. Simple.........

Conan
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I heard that arguement alright. Increase the minimum wage to put more money in people's pockets!

At the end of the day Jack and the boys have no concept that jobs follow profits and without profits we have no jobs. Pretty sad that he hasn't figured that one out...
 
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