Ireland’s AIB fined €83m over tracker mortgage scandal

Ireland’s central bank has fined the country’s second-largest lender AIB 83.3 million euros for failing to offer customers cheap mortgage rates during a scandal more than a decade ago.

punished as AIB Last year, Ulster Bank was fined €38m for overcharging mortgages at rates comparable to those of the European Central Bank after tens of thousands of Irish customers at major banks were denied loans.

AIB has set aside a fine of 70 million euros.

Tracker mortgage scandal further Damaged the reputation of the Bank of Ireland, had to be bailed out during the financial crisis. The Irish bank’s tracking mortgages became unprofitable after the European Central Bank’s interest rate fell to near zero in late 2011.

As a result, Bank of Ireland switched 40,000 customers to more expensive rates, including fixed or variable rate loans. The central bank began its investigation in 2015.

In a statement, the central bank said the AIB sanctions brought the amount fined by the bank to 174 million euros for tracker mortgage failures. The lenders themselves have paid out 737 million euros in remediation and compensation to the customers.

Ireland’s largest bank, Bank of Ireland, will remain penalized following the AIB sanctions.

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