Fianna Fáil Finance Spokesperson Michael McGrath has obtained information which shows that 40% of commercial loans owed to IBRC when the Special Liquidator was appointed had an interest rate of less than 2%.
The information was compiled by the Special Liquidator following a written parliamentary question by Deputy McGrath.
The information shows that 166 loans owed to IBRC had an interest rate of less than 1% with a further 920 loans worth €8.6bn having an interest rate of between 1% and 1.99%.
Deputy McGrath stated, “These figures provide us with a good overview of the €22bn of loans owed to IBRC when the Special Liquidator was appointed in February 2013. It is striking that €9bn of loans – over 40% of the total – had an interest rate of less than 2%. Almost three quarters of the loans in value terms had an interest rate of less than 3%. On the face of it, the interest rates seem to be extraordinarily low and it will need to be established whether these rates relate to historic loan agreements entered into by the old Anglo Irish Bank or whether they reflect decisions made by management since the bank was nationalised in 2009.
“Many mortgage holders paying over 4% or 5% on loans and SME owners paying 7% or 8% on commercial term loans will view these IBRC rates as mouthwatering. People will need to be reassured that appropriate interest rates were being charged at all times to all borrowers including in situations where loan extensions were being granted. It could well be that most of these loans relate to arrangements entered into by the former Anglo Irish Bank whereby the interest rate was linked a European reference rate but this needs to be investigated thoroughly.
I have decided to refer this information to Judge Daniel O’Keeffe who is Chairing the Commission of Investigation into IBRC and whose brief includes examining whether any preferential interest rates were extended to certain borrowers.”