Bank of ireland increase mortgage rates by .5%

waster81

http://www.rte.ie/news/2011/0812/mortgage-business.html

Bank of ireland has no other "option" but to increase the mortgage rate by .5%

Mena

I wonder how far they will go? I recall the first house I bought, we were paying 17%, back in '99.

Doesn't seem so bad in that light.

later12

It's understandable from BKIR's point of view, they do face challenges in funding, but from yesterday's interim report, time will tell how the situation described below might worsen in the next six months.

http://www.bankofireland.com/fs/doc/publications/investor-relations/interim-report-for-the-six-months-ended-30-june-20111.pdf

The impairment charge on Residential mortgages increased by €17 million from €142 million for the six months ended 30 June 2010 to €159 million for the six months ended 30 June 2011.
The increase in impairment charges on Irish Residential mortgages of €32 million in 2011 reflects higher arrears (particularly for Buy to let customers), elevated unemployment levels, lower disposable incomes, falling house prices and the general economic downturn in Ireland.

However, it deserves to be mentioned that, more generally, impairment charges on loans and advances to customers were down over €100m on the same period last year.



Mortgage arrears (90 days +) on owner occupier mortgages are up 0.79% on the first six months of 2011, which is just a slightly higher increase on the last and the first six months of 2010 (0.53% and 0.62% respectively) - perhaps due to drops in household incomes following on from Budget 2011 or rising unemployment:



Aand one more interesting statistical treat, the group's risk profile on loans and advances to customers

waster81

They could look at their own costs, but doesnt seem to be on the agenda over the last 3 years for anyone of the banks, only had minor tinkering

later12

In fairness labour costs, staff numbers, and other internal costs have fallen significantly in Bank of Ireland, but there's no way they could reasonably have cut costs to the extent that it could raise the equivalent of or even anything near what will be raised by these 0.50% interest rate increases on an ongoing basis

waster81

later10 wrote: »

In fairness labour costs, staff numbers, and other internal costs have fallen significantly in Bank of Ireland, but there's no way they could reasonably have cut costs to the extent that it could raise the equivalent of or even anything near what will be raised by these 0.50% interest rate increases on an ongoing basis

Fact is they are loss making and they have to cut their costs a lot more.

It doesnt matter that it wouldnt be equivalent to raising of mortgage rates, does that mean they shouldnt have been cutting their costs substantially more

Would you say the government should do the same and just raise taxes and leave costs alone?

Dont we cry out and constantly look for the government to cut their costs why should the banks be any different

later12

No, I agree they should cut their costs, but cutting costs alone will not make up for the serious funding problems in the Irish banks.

There is a significant downsizing of the Irish banks underway, as announced last Spring, so I don't think it's legitimate to say that they are only tinkering away.

paddy145

waster81 wrote: »

Fact is they are loss making and they have to cut their costs a lot more.

It doesnt matter that it wouldnt be equivalent to raising of mortgage rates, does that mean they shouldnt have been cutting their costs substantially more

Would you say the government should do the same and just raise taxes and leave costs alone?

Dont we cry out and constantly look for the government to cut their costs why should the banks be any different

I thought they still make an operating profit? Cutting costs wont do anything

waster81

paddy145 wrote: »

I thought they still make an operating profit? Cutting costs wont do anything

sigh thought id heard it all but cutting costs wont do anything!

paddy145

waster81 wrote: »

sigh thought id heard it all but cutting costs wont do anything!

OK let me rephrase, cutting costs will make sweet FA difference