The AIB has been fined record-breaking for its role in tracker mortgage scandals.
The bank and its EBS subsidiary were fined € 96.7 million, well in excess of what the bank had set aside in preparation for the imposition of the fine.
The AIB said it had secured a central bank fine of € 70 million in previous financial results.
Tracker scandals are the biggest overcharging problem that hits Irish banks.
AIB fines are more than double the fines imposed on Ulster Bank for the same tracker problem.
The AIB has been sanctioned for refusing cheap tracker mortgages for more than 12,000 customers during periods of rising interest rates.
The tracker turmoil cost AIB on the order of € 600 million, including refunds and compensation, statutory costs, and other administrative costs, even before the fine.
According to the central bank, AIB fines have been reduced by a third from a potential penalty of € 119 million. The standard way to allow errors. AIB recognizes 57 individual regulatory violations.
Seána Cunningham, director of central bank enforcement and money laundering prevention, said the fines reflected a serious and long-term failure by the bank.
“According to our research, when AIB withdrew its tracker mortgage offer, there was no proper consideration or concern about its impact on customers. What followed was that customers misqualified their trackers. It was a series of failures that were rejected and other customers lost their tracker rates due to AIB’s flaws in providing day-to-day mortgage services. For many of those failures, AIB addressed those failures and We had the opportunity to act to prevent further infringement of our customers’ qualifications. AIB was unable to take advantage of these opportunities. “
She said that banks had a culture of not being aware of their rights and obligations to their customers.
All lenders as a whole have approximately € 683 million in relief and compensation for 40,100 customers affected by the lender’s failure over the tracker mortgage problem.
These failures included denying tracker mortgages or setting incorrect rates when some customers were entitled.
AIB and EBS fines are fourth and fifth as a result of tracker scandals. The central bank has already imposed a tracker fine of around € 82 million on four lenders over the past two years.
These include the permanent TSB and its earlier subprime units, Springboard Mortgages and KBC.
The Bank of Ireland has not yet been fined for its role in the tracker scandal.
At the end of last year, we secured a € 94 million tracker-related reserve, including the expected fines.
The tracker mortgage scandal was first reported in “Irish Independent” dating back to October 2009.
At that time, banks denied that there was a problem.
