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Tuesday 6 December 2016

Banks adamant they won't cut variable rate

MORTGAGES

Bank of Ireland and Ulster Bank have no plans to follow AIB which has signalled its intention to cut the interest rates on their standard variable rate mortgages.

Bank of Ireland chief executive Richie Boucher (right)said that while it keeps rates under review, it couldn't give any commitment.

Meanwhile, Ulster Bank boss Jim Brown told TDs and Senators that its standard variable rate is "not overpriced".

It comes just a day after Finance Minister Michael Noonan signalled in his Spring Statement that pressure would be brought to bear on the banks over the coming months.

Pressure has been placed on the banks, the Government and the Central Bank to address the interest paid by customers with standard variable rates.

Minister Noonan has said he will ask banks operating here to reduce the rates and that he expects them to do so.

In January, Bank of Ireland announced it was to cut its mortgage rates for new customers and reduce some fixed rates only for existing variable-rate customers.

Mr Boucher also came under pressure to slash Bank of Ireland's variable rate at its AGM yesterday, but he said he expects the bank to focus on fixed rather than variable mortgages.

"We review all of our rates on an ongoing basis. We look at the cost of money, we look at the competitive environment, we look at the capital charges, but it would be inappropriate for me to make a commitment," he said.

Ulster Bank's Mr Brown told the Oireachtas Finance Committee yesterday that the bank had been reducing variable interest rates for both new and existing customers.

He said costs faced by Ulster Bank were higher here than in other jurisdictions where it and its parent company RBS operates.

Asked if the bank had no intention of reducing the standard variable rate, Mr Brown replied: "That's correct. But we continue to monitor the rate."

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