Local Fianna Fáil Senator for Roscommon/Galway Eugene Murphy said the Government must give more banking powers to Credit Unions and the Post Office network in light of the recent exit of KBC Bank from Ireland.
Senator Murphy said that the exit of KBC from Ireland will be a huge blow for their customers and their mortgage customers in particular.
“KBC’s rates were the lowest in the Irish market. Now they are selling their mortgage book to a bank which has the highest mortgage rates. There is less choice for customers- we are rapidly heading towards a situation where we will only have two major banks in this country with little or no competition which is not good for customers,” said Senator Murphy.
Senator Murphy pointed out that if a KBC customer with a 90% loan-to-value mortgage is paying a variable mortgage rate of 3.3% and they move to a bank charging 4.5% for the same mortgage it will mean a significant increase. “On a mortgage of €300,000 over 20 years, on a higher rate of 4.5%, customers will pay about €45,000 more than they would have paid with KBC. So many people and businesses are already struggling to keep their heads above water in these difficult economic times and a hike in mortgage rates could be disastrous for many people,” said Senator Murphy.
The Fianna Fáil Senator said that the Government must seriously examine the provision of giving greater banking powers to both the Credit Union movement and the Post Office network.