THE ORGANISATION SET up to improve banking culture in Ireland says it will not be commenting on individual findings by the Central Bank in its ongoing investigation into the tracker mortgage scandal.

The Irish Banking Culture Board (IBCB) was set up last year with the goal of restoring public trust in the banking sector in the wake of the tracker mortgage debacle.

Last Thursday, KBC Bank was fined €18.3 million by the Central Bank over a number of regulatory breaches relating to its handling of tracker mortgage issues.

A Central Bank investigation found that in 2008 — when tracker mortgages were becoming less profitable for the Belgian-owned bank against the backdrop of the financial crisis — KBC began to withdraw its tracker products.

In the process, the Central Bank said that KBC failed to adequately warn customers who were moved from trackers to fixed-rate mortgages that they would be unable to return to their tracker rates.

KBC was also criticised for its “deeply unsatisfactory” engagement with the Central Bank’s investigation.

The regulator described the impact of KBC’s failings on its customers as “devastating and included significant overcharging and the loss of 66 properties” — including 11 family homes.

Central Bank investigations into Bank of Ireland, AIB and Ulster Bank are yet to be completed.

Asked for comment on the KBC fine, the Culture Board said the investigation “remains ongoing and the IBCB will not be commenting on any one individual report. The Board will issue a comprehensive statement once the process has been completed for all member banks”.

A spokesperson for the IBCB said yesterday: “It is important to note that the unacceptable behaviour of the Irish banking sector in relation to tracker mortgages in Ireland was the key catalyst for the establishment of the Irish Banking Culture Board.

“Lessons must be learned from the fundamental failings identified in the tracker mortgage reviews.

“The IBCB is committed to working with all stakeholders with the aim of rebuilding trust in the sector through demonstrating a real change in behaviour and overall culture. This is a long-term and evolving process which will require persistence and commitment.”

‘Golfgate’

Funded by the five main retail banks, the IBCB is chaired by former Court of Appeal judge John Hedigan.

The 14-member board comprises five representatives of the banks along with a majority of non-bank members, including representatives of the Financial Services Union, the Irish Farmers Association and financial adviser and campaigner Padraic Kissane. 

In August, the IBCB was criticised by politicians for its stance on bank lobbyist Brian Hayes’ attendance at the Oireachtas Golf Society event in Clifden, Co Galway.

The so-called ‘Golfgate’ event — which took place in breach of the government’s Covid restrictions — led to the resignations of Phil Hogan and Fianna Fáil TD Dara Calleary from their roles as European Trade Commissioner and agriculture minister respectively.

Fine Gael senator Jerry Buttimer also resigned as Seanad Leas-Cathaoirleach.

Hayes, chief executive of the Banking and Payments Federation of Ireland, told The Business Post at the time that he didn’t think he should have to resign because, he said, “I’m a private citizen, I’m no longer a public official”. 

Asked for comment, the IBCB refused to be drawn into the matter.

“Brian Hayes is not a member of the Irish Banking Culture Board,” a spokesperson told TheJournal.ie

“Any issues relating to his attendance at the golf society event in Clifden are a matter for Mr Hayes and the BPFI.”

Commenting on the matter at the time, Róisín Shortall, co-leader of the Social Democrats and the party’s finance spokesperson, said: “It is a bit rich for the Irish Banking Culture Board to try to wash their hands of accountability in this situation.

“The purpose of the board is to institute cultural reform in the banking sector, and Mr Hayes is very much a part of that culture as the banks’ chief lobbyist.”