Gerry Adams (Louth, Sinn Fein)
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Question 237: To ask the Minister for Finance the steps he has taken or intends to taken to deal with the difficulties faced by mortgage customers of Permanent TSB who are paying higher interest rates on their mortgages than customers who have mortgages with other state owned or state supported banks; and if he will make a statement on the matter. [28212/12]

Michael Noonan (Limerick City, Fine Gael)
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As has been stated previously to the house in an answer to Question 42 on 23 May 2012, I have no role in the day-to-day commercial and operational decisions, which include these matters. Ultimately, the pricing of financial products, including standard variable mortgage interest rates, is a commercial decision for the management team and board of Permanent tsb (PTSB), having due regard to their customers and the impact on profitability. It should be noted however that PTSB recently announced a 0.5pc reduction in its standard variable rate for residential mortgage customer effective from 14 May 2011 and it now stands at 4.69% bringing the rate more in line with those charged by other institutions in the Irish mortgage market.

The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account by a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding.

While I am very conscious of the difficulties facing mortgage holders I have no function in the matter. However the Central Bank has advised me that, within its existing powers and through the use of persuasion, the Bank will continue to engage with specific lenders which appear to have standard variable rates set disproportionate to their cost of funds. The Bank has also advised me that they wrote to all lenders in October 2011 and asked them to consider the impact on arrears when considering any future interest rate increases.