Mr. Padraic Kissane:

There was previous form with this. If we remember when Bank of Scotland came into the marketplace, it brought in a tracker product, and within three years every bank had a tracker product. It was naturally going to follow that if Danske Bank was the only bank that stated that as someone's margin loan to value improved it was going to lower that margin, every bank had to react to it because it could have cornered the entire market as the product was going to be a loss leader and it was going to garner everybody. What ended up happening was that many people negotiated to get the deal approved with Danske Bank, and then went back to their own banks and got it matched or even bettered. As a broker at that time, we sent email after email to the banks to state if they did not improve on 1% we would move the customer because we were obligated to do so. If there is a better available rate we are obligated to tell our customers about it. At that point, all of the banks were coming back with improving rates all of the time.

The reason I say it became a race to the bottom is because the desire then was not how much profit the banks were making from a mortgage, it was market share and how much they were lending. If we listen back to all of the announcements, they were all about how much they lent in each year. It had nothing to do with the margins at which they were lending. It resonated because the volumes were so great they were making profits, but the profits in a normal banking environment should have been a lot more. They were charging minimal amounts and it was about getting volume. The bank manager who spoke was factually stating what the position was. He had to get €7 million out the door of one branch in a week, and he did not have lot of footfall crossing. That is an astonishing amount. The worrying point was his end comment, that the bank did not care how he did it.