Bank of Ireland letters urging move to fixed-rate loans 'a mistake'
BANK of Ireland's CEO has insisted the bank's decision to send letters to thousands of tracker-mortgage customers urging them to move to a fixed rate was a "genuine mistake".
Richie Boucher said the incident was one the bank had learned from. He also revealed that the bank had seen a surge in consumer confidence in the past year and said the Banking Inquiry had been necessary.
Last month, the bank was forced to send a letter of apology to tracker-mortgage customers after it sent them a letter which contravened Central Bank rules.
BoI had written to all mortgage customers informing them it had lowered its fixed rates. While it included all customers on tracker mortgages it made no mention of the cost and implications of giving up a tracker, which it is required to do.
"These things happen. It was a genuine mistake on our part. We thought we should communicate with everyone.
"We should have given a little bit more oversight, but we did feel that sometimes you have this balance between saying you must give the same message to everyone and then trying to tailor it and we could have done better. We learnt from this," he said.
Mr Boucher said while the bank had sold the idea of Ireland's recovery internationally as far back as 2011, it wasn't until last year that Irish customers regained confidence.
"When we re-capitalised in 2011 one of the big things for us was the confidence was external to Ireland. These were hard-headed capitalists, we had to sell them the idea that we thought Ireland would recover.
"I think it's in the last 12 to 15 months where you've seen the consumer confidence returning. We're seeing that in all sorts of parts of our business," he said.
He said one area where confidence has returned quickly was motor finance.
"We're just seeing a general uplift in the economy as confidence returns. I mean it's a real cliche, but I think it's a very true one - confidence goes down the escalator and it comes up slowly on the steps," he said.
Asked if public confidence had been affected by the Banking Inquiry, Mr Boucher replied: "It's hard for me to comment on that. I think these things are always necessary for people."
He said he believed people had learned from the mistakes, adding he was in favour of anything that helps people understand what happened and where institutions are moving on to now.
However, he said he believed the return of confidence had more to do with the bank's work on the ground, investing in its network of branches. "People observe what you do, not what you say," he added.
Mr Boucher said it was in the bank's self-interest to facilitate a recovery of confidence.
"Obviously, what we must back that up with is our willingness to lend and our willingness to work with customers."