Money Guide Ireland

As expected – following rate increases from EBS and PTSB – the 2 “main” banks in Ireland have jumped on the bandwagon and increased variable mortgage rates.

Bank of Ireland increased their rate  by 0.45 % to 3.49 %.
ICS (BOI broker arm) has increased its rate by 0.6 % to 3.64 %

AIB has increased variable mortgage rates by 0.5% (SVR rises from 2.75 % to 3.25 %
That equates to an increase of  18%

These increases follow similar rises by EBS – who increased its rate by 0.6 %, up from 3.23 % to 3.83 %.  Permanent TSB  also rose rates  this month by 0.5 per cent to 4.19 %

See all the lowest mortgage rates in Ireland here.

Tracker Mortgages are not affected.

We understand the following protection is in place with the following institutions: This is the latest information on the level of guarantee or protection for money held in Irish financial institutions or those operating in Ireland.
Updated July 2010 after the guarantee end date was extended from Sept to Dec 2010

Allied Irish Banks plc (AIB) Irish Government guarantees all deposits to the end of  Dec 2010
Anglo Irish Bank Corp. Irish Government guarantees all deposits to the end of  Dec 2010
Irish Life & Permanent plc (PTSB) Irish Government guarantees all deposits to the end of  Dec 2010
Bank of Ireland - -Irish Government guarantees all deposits to the end of  Dec 2010
EBS Building Society Irish Government guarantees all deposits to the end of  Dec 2010
Irish Nationwide Building Society Irish Government guarantees all deposits to the end of  Dec 2010

Read more about the Extension to the September 2010 Guarantee here

Post Office Savings Bank;(Not Postbank) below. State body Irish Government guarantees all deposits (always did)

ACC Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Bank of Scotland (Ireland) t/a Halifax Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Danske t/a National Irish Bank The Danish Financial Regulator While Danske t/a National Irish Bank is a branch of an overseas institution;the Minister for Finance has confirmed that savers with branches of overseas banks operating in Ireland will benefit from the enhanced €100k guarantee providing the branch concerned has confirmed its intention to the Financial Regulator to participate in Ireland’s Deposit Guarantee Scheme.;Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;

Credit Unions Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
First Active plc Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
ICS Building Society;Note: ICS is a subsidiary of BOI and can apply to Govt for full guarantee – but currently is under the Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
IIB Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Pfizer International Bank Europe Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Postbank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;Full details here
Ulster Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;

Credit institutions covered by other schemes

Rabobank The Dutch Central Bank Dutch Deposit Guarantee Scheme;100% of the first €20,000, 90% of the next €20,000.;Doubled for joint account holders.
Investec Bank (UK) Ltd The UK FSA Financial Services Compensation Scheme;100% of the first £50,000 per person.
Leeds Building Society The UK FSA Financial Services Compensation Scheme;100% of the first £50,000 per person.
Northern Rock The UK FSA Deposits held with Northern Rock are guaranteed in full by the Bank of England and HM Treasury.

Bank of Ireland have just increased the interest rates on their  “2 in1″ Mastercard and their Clear Credit Card
The “2in 1″ rate on purchases has risen from 13.9% to 14.9%. The interest rate on cash withdrawals with the 2 in 1 card has been increased by a third from   17.4% to 23.2% APR.
The interest rate on purchases for the BOI Clear card has increased from 9.5%  to 10.9% .
The AIB Click card now has the lowest interest rate on purchases – at 9.5% APR

All of our Best Buy mortgage tables have been updated today with all the new rates from BOI, ICS, EBS and Haven. More rate rises to follow from EBS and KBC on May 1st.
Irish Nationwide have not yet announced increases.
See all the  lowest mortgage rates available currently.

Bank of Ireland will be increasing their mortgage rates from Friday 16th April.
Most rates will be increased by 0.5% – fixed rates could be rising by more than that. ICS – which is owned by BOI will also be increasing rates next week.
BOI were offering payments of €750 for mortgage switchers towards legal fees – but this offer ended last week.
AIB and PTSB recently raised mortgage rates and EBS are expected to announce rate increases in the next few days also.

The ECB rate was left at 1% yesterday – it has been unchanged now since May 2009.

Most of the general public in Ireland probably think that NAMA is fully owned by the Irish Government .  (Probably – most of the general public in Ireland don’t really care.)
If the bad debts turn out to be OK – then NAMA could make a profit – so that could be good for the taxpayer?

But – there is a small catch – PRIVATE INVESTORS  actually own 51% of  Nama’s (National Asset Management Agency) property loans.
17% is owned by Irish Life which is part of Permanent TSB
17% is owned by New Ireland – which is part of the Bank of Ireland Group
17% is owned by “major pension and institutional clients”  of AIB Investment Managers
They paid €51 Million for a 51% share in NAMA.

The government has set up an SPV  – special purpose vehicle  – to buy and manage the debts. This is a way of keeping the NAMA debts off the Irish State’s balance books -  and off the national debt. This was  done to get around   EU rules about state borrowing limits

The “SPV”  is  a separate entity to Nama and will have its own board, although this will include representatives of the asset management agency. Nama will supposedly have a veto over all of the SPV board’s decisions.

If the property loans can be managed profitably, then Nama and the private backers will be paid a yearly dividend, tied to returns from Irish Government bonds. Once the entire operation is finished, the SPV will be wound up. The Government says that the investors, that is Nama and the private backers, will only be repaid their €100 million if the resources are there.

If the loans are ultimately profitable, they will be repaid their capital plus 10 per cent – (€1.7  million for each private investor)  – once the SPV is wound up.
This means that the private backers will be repaid their €51 million, plus €5.1 million, plus any dividends they will have received along the way. Any further profits over and above these amounts will be returned to the exchequer.

However, if the property loans are not profitable, Nama and the private investors will lose their €100 million.
(In the scheme of things – the €49 million NAMA investment is a small drop in the ocean of the NAMA €80 Billion debts)

So it appears that the Irish taxpayers will have paid around €80 billion to buy overpriced property and bail out the banks. But -  51% of the debt is sold back to some of those banks – for just €51 Million !!
It’s a crazy world ….. run by bankers it seems.

Brian Lenihan – Finance Minister  spoke today about funding shortfalls in the Irish Banks . He said AIB would need to raise €7.4bn by the end of the year to meet targets. It plans to start selling off assets in Poland, the US and Britain to help raise this, but the State will have to take a stake in the bank.

Bank of Ireland will require €2.7bn in new capital, but it is hoping to meet much if this from private sources.

Irish Nationwide will require €2.6bn of new funds from the Government, most of which will be payable over 10 to 15 years.
EBS will need €875m. The State will provide €100m by taking new shares in the society, which will give the Government full control.

Minister for Finance Brian Lenihan said the State would be providing €8.3 billion to Anglo Irish Bank this week alone, and that the bank may need a further €10 billion to cover its losses from bad property loans.

The State already owns Anglo Irish; it has an indirect stake of 25 per cent in AIB and a stake of 34 per cent in Bank of Ireland.
The investments in AIB and BoI will be in addition to €7bn that was provided in 2009. Anglo Irish recieved €4bn in 2009.

We are hearing plenty about the problems of the banks in Ireland and according to this – the Irish Government has pumped in €27 billion to the banks in the past year .
What has happened to all the massive bank profits made over the previous years? Who has had all that money? Where has it all gone?

These are the profit figures for AIB , BOI and Anglo Irish in the last 5 years

With all those massive profits – why should the taxpayer be bailing them out?