Stephen Donnelly (Wicklow, Independent) | Oireachtas source

Today Bank of Ireland announced a plan to return €1.8 billion to the State. This is welcome and I hope that the Tánaiste and his Government put the money to good use. However, as we get ready to take this money back, we must be cognisant of where some of it has come from. Some of it has come from citizens whose lives have been ruined by the behaviour of Bank of Ireland. Of the banks that have appeared before the Oireachtas Committee on Finance, Public Expenditure and Reform, Bank of Ireland is unique in refusing to offer 0% interest on the portion of a mortgage in distress that is shelved. It is the only bank that has refused to do that. At a meeting of the finance committee in September of this year, I went through the so-called restructures that Bank of Ireland was offering with its chief executive. We went through 90% of them and he agreed, on the record, that in all of those cases, the borrowers would end up paying more money back to Bank of Ireland. This was true in at least 90% of cases, although I believe it is true of close to 100% of cases. For borrowers and families whose problem is too much debt, the Bank of Ireland solution is for those individuals and families to pay more money than they would have had they not got into difficulty.

When I speak to practitioners who are working very hard every day to try to help families and individuals to restructure their mortgages, I often ask them if there is any bank that is doing everything it can not to act according to the spirit of the what the Government has asked for. I hear the same response every time - Bank of Ireland, Bank of Ireland, Bank of Ireland. Families all over Ireland with unsustainable debts are in a banking lottery. Those who were unfortunate enough to do business with and to trust Bank of Ireland during the bubble are being squeezed harder than those who did business with other banks.

The Irish people made a lot of money available to Bank of Ireland and €1.8 billion of that was to deal specifically with residential mortgages. When Bank of Ireland representatives appeared before the aforementioned Oireachtas committee, their figures showed that they had made a provision for half of this amount on residential mortgages. In other words, they took the €1.8 billion because they acknowledged that they would not get back about half of the money they were owed from distressed mortgages. Rather than act as the Government has asked, Bank of Ireland's explicitly stated policy is that it will not engage in any debt write-downs. Practitioners are telling me that Bank of Ireland drags its heels at every opportunity.

Does the Tánaiste believe it is acceptable for Bank of Ireland to be acting in this way? If he does not believe it is acceptable, what tangible measures can his Government take to stop it?

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