Advice on banking culture to assess the lessons learned from the tracker following the surveys


The Irish Banking Culture Board (IBCB), established three years ago in the wake of the on-track mortgage scandal, plans to assess where banks have learned “real and lasting lessons” from the country’s biggest overbilling scandal. sector after regulators completed their enforcement investigations.

IBCB chief executive Marion Kelly said in the organization’s latest annual report that the latest two Central Bank of Ireland (CBI) investigations – on the AIB group, including its subsidiary EBS, and the Bank of Ireland “will be completed within the next year”.

“After the completion of the CBI investigations, we intend to publish our views on how IBCB member banks learned about the issues identified by the Central Bank,” she said. .

The Central Bank has fined nearly € 82 million on four lenders over the past two years, including Permanent TSB and its former subprime unit Springboard Mortgages, KBC Bank Ireland and Ulster Bank, for their involvement in the scandal industry-wide mortgages.

However, the two most important cases remain unresolved, with AIB having set aside 70 million euros to cover the probable fines against the group. Bank of Ireland had € 72 million in tracker-related provisions frozen on its balance sheet at the end of June, including money set aside to face an expected fine.

Mortgage scandal tracker

In an industry-wide review ordered by the Central Bank in late 2015, Irish lenders admitted more than 41,000 cases where they had wrongly denied borrowers their right to a cheap mortgage following the main rate of the European Central Bank, or put the owners on the rate completely wrong.

Lenders have paid over € 735 million to date. While the Central Bank has said its formal review has been completed, the Financial Services and Pensions Ombudsman (FSPO) continues to deal with individual complaints that could lead to other groups of clients lining up for compensation.

The Ulster Bank, which is on the verge of withdrawing from the market, launched three High Court cases over the summer against the decisions of ombudsperson, Ger Deering, to include other borrowers of the era boom for compensation.

Padraic Kissane, a Dublin-based financial adviser who has led a protracted redress campaign for borrowers affected by the industry-wide tracker scandal, said 300 to 400 borrowers could be affected by any precedent set by the outcome of challenges.

Low level of confidence

A survey released earlier this year by the IBCB found that the Irish public has less confidence in its banking system than consumers around the world have in financial companies, according to a new survey. The results come from a separate study showing that state bank employees have seen improvements in the culture of their organizations in recent years.

Ireland’s banking sector received a net score of minus 28 in a public survey carried out earlier this year by consultancy firm Edelman for the culture council. This compares to a global average of over 16 for banks around the world according to the Edelman Confidence Barometer.

The survey found that Irish consumers have a more positive view of their own bank than the industry as a whole.

“The truth is that the levels of trust among the Irish public are not where they need to be,” said Kelly. “The IBCB is committed to continuing to facilitate cultural change in the banking industry in Ireland, which is seeing these confidence levels improve.”

The IBCB “strongly welcomed” the bill leaders’ release in July of long-planned new rules to make it easier for regulators to hold senior executives of banks and other financial firms accountable for failures under their watch. However, it could be the end of 2022 before new laws are enacted.

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