Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I welcome Dr. Hunt and his colleagues. I wish him all the best in his leadership of AIB.

I will start by focusing on the tracker mortgage examination and the prevailing rate group of customers.

A figure of 5,195 was included in the answer to Question No. 25 on the questionnaire. I presume that is the number of mortgage accounts in this category. We have been looking at this issue for some time, as has the Central Bank of Ireland and AIB. We had extensive engagement with Dr. Hunt's predecessor and the bank's team on 26 September 2017 and 23 January 2018. We also had detailed engagement with the Central Bank on 18 January 2018. Coming in as the new CEO affords Dr. Hunt the opportunity to take a fresh look at the issue. I suggest he do that, if he has not already done so.

It is clear from the original mortgage documentation that when this group of customers came to the end of the fixed rate period for their mortgages, they were then to have the option of continuing with a fixed interest rate for a further period, converting to a variable interest rate mortgage or to a tracker interest rate mortgage. The documentation goes on to state it would be at the bank's prevailing rates appropriate to the mortgage loan. "Prevailing rates" is not defined within the mortgage documentation, as far as I can see. However, a tracker interest rate mortgage is defined in section 3.6 of the documentation as being a mortgage at the ECB rate, which is a published rate, with a tracker margin as stated in Part 1 of the particulars of offer of a mortgage loan. To my knowledge, Part 1 does not actually specify the margin.

AIB withdrew tracker rate mortgages for new customers in October 2008. However, existing customers continued to remain on a tracker rate mortgage, while those coming off the fixed rate had a contractual entitlement to be offered a tracker rate. There was, therefore, a breach of contract which the bank was late in acknowledging. It did so eventually under pressure from the Central Bank. AIB is on very thin ice in its interpretation of the prevailing rates, of which there is no definition. After looking at the issue, customers had a legitimate expectation that the prevailing rate - this is the only element up for discussion - was the margin that prevailed at the time the mortgages were initially given out or the margin for a tracker interest rate mortgage when customers came to the end of their period on a fixed rate. Has this issue been looked at in detail by AIB? Will Dr. Hunt give us his interpretation of and view on this issue?