Borrowers lost some 66 properties, including 11 family homes, as a result of the overcharging, the Central Bank said in a statement on Thursday. In its statement the Central Bank said it imposed a fine "at the highest end of its sanctioning powers, reflecting the gravity with which the Central Bank views KBC’s failures."
The mortgage lender, part of the Belgium-based KBC Group, admitted to 12 regulatory breaches in the investigation. While this warranted a penalty of €26.2 million, it was reduced by 30 per cent under a standard discount where a company agrees to a settlement, the regulator said.
In addition to the fine, the bank has had to pay €153.5 million in refunds and compensation to 3,741 customers who had been affected for more than a decade. The bank failed to take proper steps to stop the harm after the Central Bank ordered lenders in late 2015 to search their loan books for cases where borrowers were wrongfully denied cheap loans tracking the European Central Bank (ECB) rate.
KBC’s fine doesn’t reflect the damage done to customers by the tracker mortgage scandal
The penalty is the second-largest levied by the Central Bank. Permanent TSB was fined €21 million in May last year for its involvement in the tracker scandal. Four other lenders, including Bank of Ireland, AIB and its EBS unit, and Ulster Bank remain under investigation.
The head of The Irish Mortgage Holders Organisation, David Hall, said the fine is "not enough". Mr Hall said: "KBC’s fine doesn’t reflect the damage done to customers by the tracker mortgage scandal, nor will it give them any additional compensation. This fine will simply go into a black hole in the Central Bank. "It’s worth pointing out that the latest fine of €18.3 million amounts to a 30 per cent reduction because the company agreed to a settlement.."
