The CEO of Permanent TSB has told the Oireachtas Finance Committee that the bank is not currently in a position to reduce its standard variable mortgage rate.
Jeremy Masding told the Committee that standard variable rate mortgages takes into account a number of costs that the bank has to recoup; including the cost of funds, risk, capital and operating costs.
"I give the committee my assurance that we are working to reduce those costs and that as those costs come down the bank will aim to share the benefit with customers,” he said.
“Unfortunately we are not in a position to do this yet."
Mr Masding said that the costs in question remained elevated in Ireland.
He said that all variable rate mortgage products had to make sense on their own account, and that meant making a return for shareholders, which was his primary fiduciary duty.
Mr Masding said that PTSB is impacted by the high level of mortgage defaults in Ireland.
"It is an unfortunate fact that people who do pay their mortgage do have to pay a bit extra to make up for the historically high number of people who can't or won't," he said.
Mr Masding said he also wished to put on record that "the constant refrain of low ECB rates is not a material fact in this debate."
He said "we do not fund our mortgages from the ECB with its historic low rate of interest; around 15% of our funding now comes from the ECB, down from over 55% at the height of the crisis."
"When it comes to funding our mortgages we are much more reliant on relatively expensive retail and corporate deposits paid to customers here in Ireland and on money raised on the international markets. All of which is much more expensive than ECB money," Mr Masding added.
He also told the Committee "we do not subsidise our mortgages in Ireland by non-interest charges such as arrangement fees, which are very common in other jurisdictions," and that that was also a factor.
Responding to a question from Fianna Fáil TD Timmy Dooley, Mr Masding said he would be "spinning a tale" if he said that all legacy issues had been dealt with, although he said that they were very much reduced.
However Mr Masding said he could "categorically assure" the Committee that each of the products, including standard variable rate mortgages, "must stand on their own two feet."
"I am running those pricing models on a regular basis including the SVR [standard variable rate mortgages]. As the inputs change we are getting closer to a position where we can share the benefit...Unfortunately we are not in a position to do that yet.”
Earlier Mr Masding also told the committee that the European Commission had signed off on its restructuring plan in April, and that this paved the way for what he described as its "successful capital raise" ahead of the ECB required date of 26 July 2015.
Mr Masding told the committee that the group had raised €525m following a number of transactions.
It sold just under 90 million new shares at €4.50 to raise €400m and had separately raised €125m through the issuance of AT1Capital at 8.6%.
Mr Masding said that at the same time the Minister for Finance successfully sold just under 22 million shares raising some €97m for the taxpayer, and that this also facilitated the re-entry of the group onto the Irish and London stoke exchanges.
In relation to arrears Mr Masding told the committee that PTSB had proposed 28,500 sustainable solutions to customers in arrears.
He said the bank had reduced the number of home loan customers in arrears of over 90 days by over 8,000, or 38%, over the last year.
However he said that “some people continue to hold out for a silver bullet that will resolve arrears and negative equity problems for everyone in one go. Unfortunately that doesn't exist. All the international experience tells us that these problems are overcome slowly and patiently and not by waving a magic wand about."
Separately, Standard & Poor's has announced the removal of PTSB from its CreditWatch listing, which the agency uses to signal its close surveillance of certain ratings.
S&P has said its long-term outlook on the bank, which currently has a 'B+' rating, is positive.