The Chief Executive of Permanent TSB has defended the bank's decision to increase its variable interest rate on mortgages.
Speaking before the Oireachtas Committee on Finance, David Guinane said the bank was forced to raise rates on the back of large losses it had made this year.
Mr Guinane said it was becoming more expensive to attract deposits than it was to sell mortgages.
He said Permanent TSB had passed on all ECB rate reductions, unlike other financial institutions.
Mr Guinane said the Permanent TSB variable rate was still lower than that offered by other institutions.
He said the decision to increase rates affected 72,000 customers or 38% of its customers.
The average monthly increase, according to Mr Guinane, is €14.75.
The bank chief said a further voluntary interest rate increase could not be ruled out. He said it was not the bank's intention to increase variable rates, but if the current rate of impairment continued, rate rises would have to be considered.
Mr Guinane said every effort was being made to reduce the bank's cost base to avoid the need to introduce rate hikes
He said the bank has 6,000 customers in mortgage arrears of over three months payment, which represents 3.3% of the bank's customer base.
Mr Guinane told the committee the worst of the difficulties in customer's ability to repay loans was over. He said the rate of increase in customers going into arrears had slowed down
32 properties on its books have been repossessed, 28 of these were voluntary surrenders by the parties involved and the remaining four were not family homes.
He said the bank would avoid going down the road or forced repossession.
