Michael McGrath
Are there no further outstanding issues?
Masding: Yes. Subject to independent assurance by the CB
McGrath: Has the CB signed off on the prevailing rate issue
Masding: We have made our view clear and we are waiting their response. I have no formal note that they disagree.
McGrath: On the Discounted Tracker issue. People got .2% discount for year one.
It seems to me that those customers had a legitimate expectation of a lower rate.
Masding: We have made our position clear and we await feedback from the Central Bank.
McGrath: On the Managed Variable Rate. the bank allows customers to sign up to this only once. When their LTV improves, they are stuck in the band they signed up to.
Masding
1) We underwrite a mortgage based on risk at a point in time for the foreseeable future.
2) Switching is switching
3) Retention is important
We undertook to look at fixed rates. That is under review.
We will not be looking at allowing people get a lower rate when their LTV improves.
McGrath: But the risk reduces over time as the security improves.
Masding: But if the property price falls we don't push up the rate band.
The focus of our retention strategy is on fixed rates
McGrath : Repeats the point
Masding: I have said what I want to say.
McGrath: You are exploiting people's inertia and the fact that they are trapped.
You have 57,000 customers on 4.5% SVR.(46,500 accounts?)
What is your blended cost of funds?
Masding: It's not just the cost of funds, the following are all higher in Ireland:
The credit risk
The liquidity costs
The capital costs
The regulatory costs
The blended cost of funds is 46 basis points
McGrath
8 customers are paying 9.1% fixed rate. Could they break out of that without incurring a penalty?
On the split mortgages - how are you proposing to deal with them? Is it securitisation?