IlP to cut commission to brokers
Irish Life & Permanent plans to reduce the commission it pays mortgage brokers to help cut costs and offset the impact of the country's property slump.
The bank will trim its commission to 0.5 per cent of transaction values as of January from 0.8 per cent currently, spokesman Ray Gordon said today.
"We remain committed to the broker channel, but it must be competitive," Mr Gordon said. The decision comes two months after Allied Irish Banks started capping the commission it pays mortgage brokers at €1,500.
Irish Life increased the rate it charges on standard variable home loans by 0.5 per cent in July.
"This is a double-edged sword," Karl Deeter, operations manager at Dublin-based Irish Mortgage Brokers, said.
"On one hand, it is a 38 per cent loss of income for brokers when placing businesses with Permanent TSB, on the other it is a bank taking the necessary steps toward profitability."
Irish Life fell as much as 77.3 cents, or 14 per cent, to €4.60 on the Dublin market today, and was trading at €4.72 at 12.30pm local time.