Banker Bemoans ‘Annoying’ Irish Mortgage Overcharging Probe

(Bloomberg) -- Ireland’s central bank needs to move on as an “annoying” inquiry into a mortgage overcharging scandal hampers growth, KBC Group NV‘s Chief Executive Officer Johan Thijs said.

The central bank is investigating all the major retail banks operating in Ireland, and KBC said it has set aside about 14 million euros ($15.4 million) for a potential fine from the regulator. Thijs urged the central bank to move on from the issues tied to the scandal.

“What is still an annoying thing is the whole tracker mortgage stuff,” Thijs said on a call with analysts after the lender’s third quarter earnings Thursday. “Honestly, I would recommend the central bank of Ireland, come on guys, turn the page, focus on doing business.”

“We have learned our lessons, we know what to do,” he said.

The central bank declined to comment.

Banks in Ireland have paid about 693 million euros in compensation and redress to more than 40,000 customers who were caught up in what has become known as the tracker scandal there. Thijs’s comments come days after the central bank’ deputy governor Ed Sibley scolded Irish retail banks for their conduct, warning the regulator “has had to push too many retail banks too hard over too long to actually put your customers first.”

Tracker mortgage loans were closely tied to the European Central Bank’s key interest rate and were popular in Ireland before the financial crisis in 2008. Then, bank funding costs surged as the financial system teetered on the edge of collapse, meaning such loans became money-losers for banks interest rates plunged. Many customers were subsequently placed on an incorrect rate.

Thijs said he wants more of a focus on the future.

“Stop doing old nitty-gritty stuff which is an administrative hampering of the development of the financial institution -- and the financial market as a whole in Ireland,” said Thijs. “Let’s turn that page.”

--With assistance from John Martens.

To contact the reporter on this story: Peter Flanagan in Dublin at pflanagan23@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Dara Doyle

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