Mr. Fergus Murphy:

The Central Bank conducted a review of payment protection insurance last year and has asked all institutions to conduct their own review in this regard. EBS and AIB sell payment protection insurance in three main areas, namely, alongside mortgages, personal credit and credit cards. Since the inception of the consumer protection code in August 2007, some 160,000 customers have bought a PPI product from us. PPI has acquired a bad name in the United Kingdom in the past five or six years, where penetration rates were as high as 95% in some products. In other words, if one took out a mortgage, there was a 95% chance one would also purchase payment protection from the same provider. In Ireland, on the other hand, penetration rates have never been more than approximately 25%. Therefore, we believe this issue is on a different scale in this country compared with what happened in the United Kingdom.

Our review of PPI is ongoing and will continue until the end of 2013. There is no need for customers to do anything in this regard - all of them will be contacted by 7 December this year. One in five of our customers has made a PPI claim against his or her contract in the past five years, and four out of five of those claims have been upheld and paid out. In other words, it is a product that has been of real value to customers. As I said, we believe the situation here is quite different from that in the United Kingdom. We are doing all we can to assist customers in this regard and will have contacted all of them by 7 December.

In regard to the standard financial statement, I agree with the Senator that it is very comprehensive. We follow the format prescribed by the Central Bank, which includes a huge amount of detail in regard to expenditure. In fairness to the customer and to the bank, it is very important that we understand where the former is at in regard to affordability. We must ensure he or she has sufficient income to have a reasonable standard of living thereafter. The SFS, burdensome as it can be, does clarify the situation very strongly. Although it might be possible to have a slimmed down version, it is important that we can clearly see the nature of the expenditure for a particular individual or family.