You could be right discostu. I've speculated about whether BOI could continue to maintain such an extensive network following AIB's branch closure decision. I can't see how making another 1k staff redundant couldn't see branch closures. Sure technology and lower football means less staff are necessary to maintain an individual branch but it's still bloody hard to keep a branch running with continually reducing staff. There's certain functions and roles that must be filled no matter how small a branch is.

Good spot discostu.

Simon Carswell in The Irish times took Bouchers comments and said "the lender has ruled out any branch closures". The Indo did something similar.

As you said, what Boucher actually said was "On that basis we’ve been reducing the cost within the branch network – but I think we’ll be keeping broadly the same footprint”.

Hence, sloppy reporting by the IT and Indo and coded weasel words by Boucher.

On the Sunday business show this morning there was a piece about.,I think it was Marks and Spencers moving into the banking area. I didnt get whether it was having a Marks and Spencers bank or if they were going to set up a facility for a bank to operate out of the various M&S branches.I am down Weesht at the moment and heard this after my morning swim so it could be water on the brain as well...

M&S are offering banking services with HSBC. UK only at the moment. Did the Business Show say M&S were going to introduce services in Ireland?

I got that impression Fungus but to be honest I was shivering more than listening, I think they were referring to some newspaper article, and mentioned that the"banking service" would operate the same hours as the shop.

Is this something similar to the NIB and AIB tie in with An Post? It sounds a bit weird at first but it would actually make a lot of sense if it were something like cash lodgement and withdrawal services. For M&S it expands their range of services and brings additional footfall. From a bank's perspective, you want to maintain a large distribution channel for your services to make you look attractive by comparison to competitors but at the same time the footfall in branches brings very little additional benefit as most product sales take place outside of the branch.

I would be very surprised if M&S/HSBC are launching in Ireland. Having said that HSBC Dublin have now hooked up with Tesco Bank in Ireland to provide banking/credit card services.

The M&S/HSBC service is not comparable to the An Post/NIB/AIB set up. M&S Bank is a segregated brand. An Post are providing services on behalf of others.

Bank of Ireland are currently issusing just over 50% of the small number of mortgages being issued.

The balance of just under 50% are spread among all the other providers:

AIB
EBS
KBC Homeloans
National Irish Bank (Danske Bank A/S)
Permanent TSB
Ulster Bank

- 25th August 2012

And the link.


One thing I would say ...



... is that he fails to mention that many (most) of those who enjoy the low tracker rate paid boom prices for their properties and consequently have much, much higher mortgages.

That is a very poor argument.

The repayments on a 35 year tracker mortgage for a value of X are the same as that of a 20 year standard variable mortgage of half X. So even if the value of the property has dropped by 50%, the holder of the tracker mortgage still makes the same monthly payment as someone who has bought the same house with a variable rate mortgage now at half its original cost. The holder of the tracker mortgage is effectively no worse off in terms of repayments and thus affordability.

When banks loses money, we, as taxpayers their owners, all lose. Banks loses money because of a portfolio of smaller commercial property loans - the larger ones having gone to NAMA, poor quality mortgages, especially buy-to-let, and tracker mortgages. Banks have to increase their standard variable rate to subsidise those on loss-making tracker mortgages. A bank’s portfolio of tracker mortgage represent a hurdle of built-in losses that has to be overcome before any profits can be generated. These subsidies are ultimately being provided by the taxpayer. If we want banks to have any value so they can generate some return when they are sold, it is in all our interests to develop a mechanism to allow tracker rates to be increased. The burden is not being shared. Those with tracker mortgages are being insulated from interest rate increases.

You cannot on the one hand criticise banks for increasing their standard variable rates and on the other allow tracker mortgages to remain protected.

The more losses banks incurs the more they must be subsidised by the taxpayer.

So why should holders of tracker mortgages be insulated from burden sharing?

This is creating one more group of people who are being given special treatment and insulated from the consequences of their actions.

There is an agreement between the bank and the mortgage holder, signed by both parties, as this is what was deemed to be effordable.
If the bank is going to break the agreement, there is no reason why the mortgage holder shouldn't do exactly the same and walk away from his/her property (likely to be in NE).
You argument sounds like the Taxpayer-version of the "Where-is-my-NAMA" idea.

Investments can go down as well as up. Risks are to be shared by both parties if you want a regulated financial system.

Quickly plugged some figures into Karl's mortgage calculator. Assume current variable rate of interest of 4.3% (which BOI will be charging by October).
Also assume old tracker on ECB + 1.1% which would be 1.85%.

So today, someone borrowing 250K @ 4.3% over 25 years = €1,361 per month
In the tracker days, 327K @ 1.85% over 25 years = €1,362 per month.

So to get the same repayments today, you can borrow 24% less than the borrower in 2006.
However, house prices have fallen by more than 24%.
So I'd say a new purchaser today is still better off than someone on a tracker from 2006.

More confirmation of this .5% hike

http://www.rte.ie/news/2012/0924/increa ... iness.html

As a matter of interest is this the rate rise that brings BOI's variable rate to 4.3% or is this an extra .5%?