permanent TSB increase Variable Interest Rates
From RTE.ie
Permanent TSB has said it is to increase its standard variable mortgage interest rate by half a percentage point from next Monday.
The move will affect more than 50,000 borrowers, and the bank says that the average monthly mortgage repayment increase will be €14.75.
The bank cited a high cost of funds and tightening margins in the lending market but said its rates remained competitive.
Reacting to the move, the general president of the SIPTU union, Jack O'Connor, said he would write to Finance Minister Brian Lenihan calling on him to withdraw the Government's guarantee from banks which plan to raise interest rates to mortgage holders.
'Apart from the sheer immorality of increasing interest rates it will further exacerbate our overall economic problems, further damaging consumer confidence and reducing consumer demand, thus jeopardising even more jobs in the economy,' he said.
Earlier this week, credit rating agency Fitch downgraded Permanent TSB's parent company Irish Life & Permanent's rating from C to B/C, due to concerns about its profitability over the next two to three years.
The ratings agency said Permanent TSB would probably report a loss this year, and could make another loss in 2010. Fitch said Permanent TSB was suffering from more expensive funding on international markets and could not re-price its loans quickly enough to compensate, resulting in lower revenue from interest.
Spokespeople for Bank of Ireland, Ulster Bank and Halifax said their banks had no plans to increase variable rates at the moment. A spokesperson for KBC Homeloans said the bank kept its rates constantly under review.
Under normal circumstances I wouldn't agree with Jack O'Connor but in this case he is 100% correct. The government are keeping the banks afloat and now they are attempting to take extra money from the pockets of Irish people. If ptsb are allowed get away with this then the other banks will follow suit.
Permanent tsb is a part of the Irish Life Group and this is the company who used €8 billion of depositors funds to bail out Anglo Irish Bank. And the people who allowed this to happen appear to have gotten off scott free (from a legal perspective).
Surely the Minister Brian Linehan has to act??