Bank of Ireland and Ulster Bank refuse to reverse rate decision

BANK OF Ireland and Ulster Bank showed no signs yesterday of reversing their decision not to pass on a 0.25 per cent rate cut announced last week by the European Central Bank (ECB).

On Thursday night AIB, in which the State has a 99 per cent shareholding, said its board had decided to pass on the cut even though its top executives told the Government on Wednesday that it would not do so.

Executives from AIB, the Bank of Ireland, which the State has a minority shareholding in, and Ulster Bank, in which it has none, met with the Governments Economic Management Council which included both Taoiseach Enda Kenny and Minister for Finance Michael Noonan.

Following those meetings, Mr Kenny said he had asked them to pass on the rate reduction but that they had declined.

He said he had expressed “the absolute disappointment of Government in this matter”.

Some 24 hours later, a terse statement was released by AIB which said: “Following the meeting between AIB, members of the Government and the Economic Management Council, the board of AIB has decided to implement a 0.25 per cent interest rate cut to its variable rate mortgages.

Chief executive of the Consumers’ Association of Ireland Dermott Jewell said he was “delighted” AIB had passed on the cut but said he was displeased it took so much effort to have them turn the decision around.

A Bank of Ireland spokeswoman yesterday declined to say if it would lower its rates but said they were now under active review.

In a statement, Ulster Bank said it kept “all our products and services under continual review, having regard to our cost of funds. Therefore if the cost of funds goes down we would pass on those rates.” A spokeswoman declined to comment further.