AIB chief: No choice but to increase mortgage rate
The head of AIB has said that he has a mandate to return the state-owned bank to profitability and therefore has no choice but to increase variable mortgage rates.
The financial institution has increased its variable rate by 0.5%, bringing it to 3.5%.
Earlier this month, AIB refused to pass on the latest interest rate reduction by the European Central Bank.
AIB's CEO David Duffy has defended the hike stating that it is needed if the bank is to have any chance of fulfilling its commitments to the taxpayer:
"Unless we are able to create profitability for this bank which is the reason we were funded by the state, to create profitability, which means capital for lending in this economy", he said
"If we do not create a profitable bank then AIB will not be able to play a material part in the support of this country's growth. It's a very unpalatable fact but it is the reality of the situation".
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