Ms Francesca McDonagh:

There are three very important questions in there. How did this happen? Who is responsible? Was anyone targeted to do anything that was not in the best interests of customers? To answer the first question, it is important to look at the context in 2008. It was October 2008 when the tracker mortgage product was discontinued for new customers. There is a deep root-cause review ongoing which will look objectively at the root causes and learnings from this.

It is important that we learn from it. However, when I look at 2008, and I was not working in Ireland at that stage, I am cognisant that the product at the time was not profitable. It was lossmaking and not a sustainable product in 2008. The stability of the whole banking sector in Ireland was at risk. There was a prudential survival requirement to discontinue products that were unsustainable and losing money every day.

The bank took a decision in October 2008 to discontinue tracker mortgages for new customers. Looking at it from my perspective, coming in, it was the right decision to stop a product that was not profitable. Consideration was given at the time to customers who were on a fixed rate mortgage but had the legal right to a tracker. From 2008 onwards, there were 20,000 customers who had previously been on a fixed rate and had a contractual right to a tracker. We discontinued trackers, but appropriately, seamlessly and correctly they still rolled over into a tracker mortgage.

We discontinued the product for new customers. However, 20,000 customers appropriately exercised their contractual right to roll into a tracker in the future. That is an indication those customers had been considered. When I looked at documentation I see that was understood. However, that application was not consistent. There are 3,400 in respect of which at some stage, when they were on tracker, the rate was slightly off by 0.15%. We have put 100% of those customers, of those who are alive today, back on the correct rate and compensated and redressed them for those differentials. We can talk about the average, but the differential is not very large relative to some of the other numbers in the industry.

However, 6,000 customers did not get their contractual entitlement to a tracker. I see no indication of intent or desire to do that. Whether it was lack of clarity in some of our terminology or not taking a sufficiently customer-focused approach, those 6,000 customers did not get the tracker they were entitled to. That has been identified and accepted. Our focus and energy is on giving them their money back via compensation and redress by 31 March or as soon as they respond to us.