Bank of Ireland increase differential on tracker rates

Can I make a suggestion?

BoI is currently withdrawing from business & commercial banking in GB & focusing on its ‘retail’ business including mortgage lending via the BOI /Post Office Joint venture
- this is as a direct result of a change to EC State Aid package (I wonder what the proceed is for ordinary citizens to object to such changes- something for another !day

Perhaps a useful lobbying tactic would be to tackle the Post Office at senior level, my understanding is that there is cross representation on their respective boards
-PO are very protective of their own perceived status as the ‘most trusted brand on the high street’
- also Federation of Sub-Postmasters as it is through their premises that a lot of BOI promotional material is distributed & I don’t think they get much of a financial turn but will get all the flak in future
It would be interesting to see whether the offending clause which BOI is relying on is included in new mortgages originated via the PO JV.
If it is then the PO should be asked for their opinion on the fairness/efficacy of this clause
- if on the other hand it does not then BOI needs to be asked why not?
BOI has a large portfolio of Euro tracker mortgages in its Republic of Ireland business but does not appear to be imposing similar rate increases there – either the same clause is not in its mortgages there or there is a political reason for not doing anything -hence question above – what about trying to involve the EC & objecting to restructuring of State Aids on the basis of discrimination against UK customers?

The BOI -POCL joint venture dates back to the early 2000's. the business was only transferred into BOI UK a few years ago following the rescue of BOI by the Irish taxpayer & EU & particularly after Jeff Prestridge in Daily Mail mounted something of a press campaign about depositor protection.

Remember also that until the creation of BOI (UK) Ltd BOI operated in UK on the basis of 'passport' under EU rules -the UK incorporation is simply a transfer of existing business, it is not in any sense a 'new' operation All decision making rests in Dublin & Group Risk Management policy applies across all business units regardless of where they are incorporated.

The bank cannot argue that it's UK trackers in any way represent a different risk from its ROI /Euro mortgages & that differential costs of funding/ capital reserves rules apply - it is BOI Group which has the problem not just BOI UK.

Reply to the comment left by "GHH 64" at "03/11/2013 - 21:13":

I think you need to read the precise words of the loan agreement and associated mortgage conditions that applied at the time the mortgage was taken out. I say this because the courts will look at the words with really very great precision indeed. What do the terms say in the copy I have? 'our mortgage lending business'. Very precise indeed. 'Our mortgage business'. Not the bank as a whole. The terms I have are Bristol & West terms, so this means 'the mortgage business' of Bristol & West. Not the mortgage business of Bank of Ireland generally including the ROI element. Again, it's a case of everyone needs to delve into the detail, and generalisations really do not help, in fact they send you down blind alleyways.

Reply to Paul 6/11/2013 13.31

I do appreciate your comment however the mortgage I have an interest in is a Bank of Ireland mortgage, originated via a branch in Northern Ireland, it is not a B&W mortgage, it also relates to a residential mortgage not a BTL mortgage, it is not a 'self-certified' mortgage, it is a repayment mortgage not interest only - it is as close to a bog standard tracker mortgage as it is possible to get.

I am conscious that any legal challenge will look at precise terms & conditions etc but the issue is not solely confined to B&W mortgages.

I am also conscious that BOI has a corporate problem which it is not addressing with a corporate solution but rather trying to pick off various sub-groups of customers. A single corporate treasury function manages all BOI funding issuing, a single corporate function manages capital raising/allocation across all business units. There is a single Group Risk management function.

By way of background I worked for BOI for a number of years so do I have some insight to the corporate structure & organisation & I do not make my comments above lightly-
but incandescent & spitting tacks -oh yes!

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Reply to the comment left by "GHH 64" at "03/11/2013 - 21:13":

The fundamental point you miss with regards to BOI. Is that the UK operation has to comply with UK regulation and capital requirements in its own right. Makes no difference where the power centre is. So doesn't operate on a passport.

Reply to the comment left by "Colin Childs" at "07/11/2013 - 23:35":

Surely the point is that it is UK mortgage borrowers who are being screwed by BOI, while Irish mortgage borrowers are getting off with a light touch, even though it is the Irish property market where there are problems. If the mortgage terms are with BOI, and the definitions are the same as the terms I have on this Bristol & West mortgage, then some of your arguments could have merit for those customers. But to force UK borrowers of B&W to pay more than their fair share of the rebuilding costs of the BOI as a whole, ignoring the fact they didn't sign up to a BOI mortgage, surely cannot be right. The terms are very specific, not at all woolly. BTW, does anyone know what the UK regulator ordered as to B&W? Or did it just make a blanket BOI order?

Reply to Colin Childs 7/11/13

I'm not a lawyer but I suspect that location of the centre of power is quite crucial!
Of course the UK operations must meet UK regulations & capital requirements etc in doing so the UK operations have no independent strategic decision making authority iro capital raising or allocation.

I suspect that the UK operations when confronted with a capital requirement from the UK regulators will in effect apply to BOI HO in Dublin for allocation of that capital to the UK business in a way which satisfies the UK regulator.

BOI will then decide at corporate level in Dublin how to address that capital requirement - re- allocation of existing Group capital/ raising fresh capital in the market or in this case by increasing profitability & retaining that capital within the business/ shrinking the asset/loan base to reflect existing capital etc.

Are we all clear that the wording of the offending clauses in BOI/B&W mortgages is identical? (I'll post the wording of the clause affecting my position later)
Do we know when the wording was introduced?
Do we know whether or not was introduced with the deliberate intention of being used in the way it now is - which would be very prescient of the bank but would carry obligations to inform customers at the time - or has it simply latched on to a T&C & sought in desperation to re-interpret it?

Reply to the comment left by " " at "04/03/2013 - 19:42":

and also to Maria, Richard Kent, Gary Nock etc.

This is supposed to be a discussion forum and so far Gavin has offered the other side of the argument. This is useful as in order to mount a challenge you need to prepare for the other side's arguments. He has been polite (unlike you). On what grounds has he no place on this forum? The personal comments attacking him devalue this discussion. You are whipping each other up into an undignified frenzy as with the thread about deposit protection.

His points are perfectly valid. We may be worse off due to this rate rise and we all will be in future whatever the cause. Rates may go up anyway sooner than previously thought and then there will be no contractual argument. No-one wants to pay more than they have to but for nearly five years you have been paying next to nothing, if you haven't planned for rates to rise then you haven't done your homework.

I wonder about the unfair terms defence. A good lawyer could argue that the terms are unfair but to the bank not to the customer.

Of course we all want rates to be as low as possible and it is a nuisance but I fear any action will be overtaken by events when rates go up. Gavin is right that landlords should explore other options as the law is notoriously unpredictable.

No doubt I will get a load of abuse for this post which will show the level to which this thread is sinking. Please confine your comments to the subject - if you disagree, fine, but don't call the poster stupid or naive because they don't agree with you.

Reply to the comment left by "Puzzler " at "08/11/2013 - 17:25":

Agree with your sentiments totally. The lender in each case will have a defence that's for sure. No two lenders are alike either. The Co-Op's recent woes illustrate that the impacts of easy available credit and over leveraged borrowers has some way to run yet.

Reply to the comment left by "Puzzler " at "08/11/2013 - 17:25":

Very well put Puzzler, whoever you are. Where is Mark Alexander?

Reply to the comment left by "Anon " at "08/11/2013 - 18:27":

I'm here, watching to see how this plays out. Please don't drag me into the argument, it's easy for you guys to take sides, you're anonymous.

Keep it polite and professional though please chaps, I don't like to have to moderate..
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