Shareholders dialling in AIB’s annual general meeting on Wednesday looking for a steer on how the global pandemic has impacted the bank were generally left none the wiser as it holds out until May 12th to provide a trading update.
AIB revealed it has provided over 40,000 temporary payment breaks for households and businesses hit by the economic shock. But details of the extent to which Covid-19 has hit normal activity and expected to give rise to a fresh round of loan loss impairments are for another day.
"The economic environment has changed hugely in the last month but the Covid-19 pandemic will abate from a health risk perspective and we have to look at how we support our customers and assist in the great task of rebooting the economy," said chief executive Colin Hunt.
Shareholder and founder of online consumer forum Askaboutmoney. com Brendan Burgess had another group of customers in mind as he laid into the bank over its treatment of 5,900 mortgage borrowers denied a tracker loan when they came off fixed-rate contracts from late 2008.
‘Service failure’
AIB took an almost €300 million provision in its 2019 results after the Financial Services and Pensions Ombudsman made a decision on one such case that came before him. The bank, which previously only offered this group €1,615 each for a “service failure” in late 2017, is now planning to write off 12 per cent of these borrowers’ mortgage balances and send out a cheque for interest payments paid on the relevant capital.
But it is refusing to put them back on a tracker loan, arguing the prevailing rate would be 3.3 per cent, higher than many fixed rate products in the market.
“Instead of putting the tracker scandal behind you as a legacy issue, you seem to be determined to keep the tracker scandal alive,” said Burgess. AIB executives confirmed that 12 court cases have been initiated it by aggrieved borrowers. The issue continues to haunt.
