merrion street

The Tánaiste, Leo Varadkar TD, the Minister for Finance, Paschal Donohoe TD, and the Minister for Public Expenditure and Reform, Michael McGrath TD, had a series of meetings today and yesterday with the CEOs of the country’s three largest Irish banks; Bank of Ireland, AIB and Ulster Bank.

The meetings provided a highly valuable opportunity for the Tánaiste, Minister Donohoe and Minister McGrath to impress on the banks the critical role that they must continue to play in supporting a rapid recovery for Irish businesses, and for the Irish economy.

All three banks are committed to the success of the new €2 billion Credit Guarantee Scheme, which will be launched shortly. They assured the Tánaiste and Ministers that the 80% Government guarantee means that interest rates under the scheme will be significantly below market rates and that the scheme would be operational as soon as possible.

The banks assured the Tánaiste and Ministers that work is ongoing at the highest levels to ensure a smooth return to regular repayments for their customers who are currently on COVID-19 payment breaks. Customers who have difficulties returning to regular repayment at the end of the payment break will be supported with a range of options so that a manageable repayment can be agreed.

The Tánaiste also asked about the increased usage of payment cards and other electronic payments, and whether this additional volume creates an opportunity for banks to reduce their charges on these cards to retailers.

The Tánaiste said:

We had frank and constructive conversations with the CEOs of the three main banks this week. I welcome the commitment from the banks to work with Government to help businesses and all of their customers, as we recover from this crisis and return to growth. In particular, they have given us a commitment that they will participate in the enhanced Credit Guarantee Scheme and will ensure that interest rates under the scheme will be significantly below current market rates. We have all agreed that this is an important opportunity for the banks to play a leadership role as our economy reopens.

Minister Donohoe said:

The retail banks play an important role in the efficient functioning of our economy in normal times and this role is even more critical in these difficult times as we seek to reopen the economy and return to sustainable levels of growth as quickly as possible. I welcome the undertaking from the CEOs of the three largest retail banks to support all their customers, including assisting customers with difficulties returning to full repayment at the end of the payment break.

Minister McGrath said

With the government willing to provide an 80% guarantee for credit, it is vital this is translated by the banks into products with terms and conditions that are attractive for businesses. Recognising that every case is different, we emphasised the need for the banks to work with customers who are coming off mortgage payment breaks, and to ensure those customers are given a range of options to put their mortgage on a sustainable footing.