By Eamon Quinn
DUBLIN--Allied Irish Banks Plc--one of Ireland's main surviving
lenders that received billions of state aid--said Thursday it can't
afford to pass the European Central Bank's rate cut on to borrowers
paying variable-rate home loans because its rates are already
loss-making.
However, the bank will pass on the ECB's rate cut of 25 basis points
to borrowers on its tracker home loan mortgages which are linked to
ECB rates, AIB Chief Executive David Duffy said in a statement.
"We are working hard to return AIB to a sustainable footing so that we
can ensure we deliver a return to Irish taxpayers on their investment
in the bank," Mr. Duffy said. "Our products need to be priced above
our cost of funding to avoid generating further losses for our
shareholders."
AIB was effectively nationalized early last year after receiving about
20 billion euros ($25 billion) in government aid during the country's
banking crisis.
Write to Eamon Quinn at eamon.quinn@dowjones.com
(END) Dow Jones Newswires
July 05, 2012 11:25 ET (15:25 GMT)
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