The Central Bank's revised mortgage deposit rules will help to remove blockages in the market and are likely to lead to some necessary short-term price rises for first-time buyers, AIB's chief executive said today. 

"We think it's helpful and going to help bridge the apparent real problem, which was people's inability to gather deposits," Bernard Byrne told the Oireachtas finance committee a day after the rules were eased for first-time house buyers. 

He added that prices for first-time homes are likely to rise in the short term, some of which is necessary to encourage properties onto the market.

Mr Byrne also told today's committee meeting that about 14 AIB mortgage account holders could have lost their homes by not having the correct tracker rate applied to their loans.

Mr Byrne said this was the bank's best "assessment" of the number at this point in time. 

He said AIB had written to 2,600 mortgage customers recently to inform them that they were overcharged on their loans by being denied a tracker rate in the past.

Meanwhile, AIB is in a position to pay a conservative, ongoing dividend to the Government and talks are continuing over when it can restart payments following the financial crisis, its chief financial officer said today.

"Given we are currently generating about €1 billion on a recurring basis and were paying €440m to the government on non-equity instruments, we would view ourselves absolutely being in a position to pay a conservative level of dividend on an ongoing basis," Mark Bourke told today's committee meeting. 

Mark Bourke said AIB did not mind whether it repaid the state via dividends or a share sale.

"Given we are currently generating about €1 billion on a recurring basis and were paying €440m to the government on non-equity instruments, we would view ourselves absolutely being in a position to pay a conservative level of dividend on an ongoing basis," Mark Bourke told today's committee meeting. 

Mark Bourke said AIB did not mind whether it repaid the state via dividends or a share sale.

He added that the bank is engaged with regulators and the Government over its dividend policy with the objective of beginning payments as early as possible.