Increased loan rate son the way - BOI

100gSoma

BANK of Ireland (BoI) is increasing a string of its lending rates just three days after the taxpayer took a 16pc stake in the lender.

The bank is set to raise the interest rate it charges its customers on overdrafts, personal loans and student loans.

At the same time, it is to cut the interest it pays to customers who remain in credit on their current accounts.


source: http://www.independent.ie/business/irish/bank-of-ireland-to-raise-lending-rates-on-loans-and-overdrafts-2078627.html

Domscard

100gSoma wrote: »

BANK of Ireland (BoI) is increasing a string of its lending rates just three days after the taxpayer took a 16pc stake in the lender.

The bank is set to raise the interest rate it charges its customers on overdrafts, personal loans and student loans.

At the same time, it is to cut the interest it pays to customers who remain in credit on their current accounts.


source: http://www.independent.ie/business/irish/bank-of-ireland-to-raise-lending-rates-on-loans-and-overdrafts-2078627.html

I'd really like to comment or discuss this, but I'd only get banned

100gSoma

yep. I'm sure your not alone in those feelings. :rolleyes:

Toots

Discuss away, but keep it constructive.

100gSoma

I suppose it seems unfair that the banks are being saved at any cost to the taxpayer, and yet won't give credit and continue to increase costs to the customer.

good quote here

For the past year, this column has been warning of a “triple lock” in the Irish banking system, which would financially incarcerate the Irish people for a generation.

The triple lock would solder the people to the banking system in a suffocating embrace forcing us to borrow from tomorrow to pay for yesterday and, in the process, destroy the opportunities of today.

Now with the Government upping its stake in Bank of Ireland, this prediction — regretfully — is coming to pass. The worst thing is that it doesn’t have to be like this. The latest news that some development land in Athlone valued in the boom at €31m is now worth only €600,000 has truly terrifying implications for all of us, because it means NAMA will bankrupt us, and the triple lock implies that we can’t sever the fortunes of the people from the fortunes of the bank.

Let’s just recap what I mean by the triple lock. The first lock was the bank guarantee, the second lock was NAMA and the third lock was the “forced” nationalisation of the banks. It is important to remember one overriding fact: we do not need Bank of Ireland or AIB. This truism needs to sink in. There is nothing sacrosanct about either, nor is there anything sacrosanct about the debts these banks have run up. These debts have nothing to do with us.

Yes, we need a banking system or a couple of functioning banks, but they don’t have to be AIB or Bank of Ireland as constituted at present.

At this stage, the Government should be trying to give the banks away for free to a large European bank. This is what you would do if a sweetshop were in trouble and banks are no different. Any new owner, taking the opportunity of having cash, not debt, in a downturn, will do a deal with the creditors. This is how normal bankruptcies work.

source: http://www.davidmcwilliams.ie/2010/02/24/its-time-to-shout-stop-nama-is-grand-larceny

Toots

From what I can see, there is credit being given, but certainly not to the same extent as it had been. I haven't been in the office for the last 2 days so I haven't heard the official internal blurb about the rate increases, but I think they'd probably have been better off doing away with interest on the current accounts altogether. Once it dropped below 1% it was a joke really. It's embarrassing when customers ask what the interest on the current account is and you tell them 0.75% (soon to be 0.25%).

If I was a perspective customer coming in to open an account, I'd probably open the non-interest bearing account. For the sake of 0.25% I wouldn't be bothered with the hassle of trying to find proof of my PPS no, etc. Also if you're doing your taxes at the end of the year it's just another thing to have to add in. More trouble than it's worth IMO.

100gSoma

that's a good point toots. It is hardly worth the effort for 0.25%. I remember with an old BOI current account I had, that credit interest was not automatically enabled when you opened the account. you had to send in a written request to have it enabled. anyway, the euro or so you'd make every month barely offset any fees, and now with mostly fee free banking available theres not really any point. savings accounts are for credit interest IMO.
I think its a good thing that banks are being more selective with the credit they are providing, but the feedback from small businesses seems to be they just cannot secure any credit. As we know, most small businesses need a line of credit to operate day to day, so tougher credit criteria will make it very difficult for them to stay afloat. As for mortgages, I was never a fan of giving someone up to 10x their annual salary or 100% mortgages. Bad ideas from the offset.

Andymfinancial

100gSoma wrote: »

that's a good point toots. It is hardly worth the effort for 0.25%. I remember with an old BOI current account I had, that credit interest was not automatically enabled when you opened the account. you had to send in a written request to have it enabled. anyway, the euro or so you'd make every month barely offset any fees, and now with mostly fee free banking available theres not really any point. savings accounts are for credit interest IMO.
I think its a good thing that banks are being more selective with the credit they are providing, but the feedback from small businesses seems to be they just cannot secure any credit. As we know, most small businesses need a line of credit to operate day to day, so tougher credit criteria will make it very difficult for them to stay afloat. As for mortgages, I was never a fan of giving someone up to 10x their annual salary or 100% mortgages. Bad ideas from the offset.

I think we all agree that the banks caused the problem with over lending to people who couldnt really afford it. The banks in my experience as a broker have more than just tightened up. Many banks are now only taking the 'cream' of clients' and have closed their doors to the average earner. On the other side of the coin my wife recently applied for a car loan in her own name (she doesnt work, she is a housewife) and it was given to her immediately! I didnt even have to be on the application. She also got a Debenhams card with a limit of €500 immediately, without a job! Now how does that work????