Bank of Ireland CEO to Say Lender Too Slow in Loan Scandal

Updated on
  • CEO McDonagh to appear before lawmakers in Dublin Tuesday
  • Former HSBC executive became chief executive in October

Bank of Ireland CEO Francesca McDonagh.

Photographer: Artur Widak/NurPhoto via Getty Images

Bank of Ireland Group Plc has paid compensation to more than half of its customers caught up in a mortgage overcharging scandal, the lender’s chief executive officer will say Tuesday.

Irish banks have identified about 34,000 accounts which had the wrong interest rate applied to their loans, or were not offered tracker mortgages, closely tied to the European Central Bank’s key rate, when entitled to them. About 9,400 of those were Bank of Ireland customers.

“Quite simply, I believe Bank of Ireland took too long to get to the right position, and didn’t go far enough in putting the customer first, ” Francesca McDonagh will tell lawmakers in Dublin in one of her first public appearances since she took the helm in October, according to a copy of her testimony seen by Bloomberg News. “This has undoubtedly caused many of our customers financial pain and personal distress.”

By last week, the number of customers receiving redress and compensation has increased to more than 5,000, and over 68 million euros ($84 million) has been paid, she will tell the committee.

The total amount of redress and compensation offered to affected customers is 108 million euros, she will say. Bank of Ireland declined to comment.

The bank’s shares dropped 0.4 percent to 8.10 euros as of 8:08 a.m., giving the company a market value of 8.7 billion euros.

(Adds shares in last paragraph.)
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