Insurance Overview

No evidence of a policy found. The Alburaq product range does apply principles of Shariah law, however.

1. Credit Lending 

Bank of Ireland offers a standard 90% LTV (loan-to-value) rate for house purchase/re-mortgage. This compares favourably with the FSA’s recent Turner Review which suggests that LTV (loan-to-value) rates be set at 90%, i.e. that borrowers should have at least a 10% deposit for a mortgage. The bank offers 92% LTV for first time buyers. 

The bank also offers a 4.5 times LTI (loan-to-income) rate to single borrowers, 4 times for joint borrowers (or 4.5 plus 1) while the Turner Review suggests just 3.5 times. 

In terms of running credit checks, the bank states that it does an assessment to determine how much customers can afford to borrow and the most appropriate type of borrowing. It looks at income and financial commitments and the customer’s financial history as well as information from credit reference agencies and a ‘credit score’. The credit score works out the risk of defaulting on repayments. It also takes into consideration what security the customer can provide. 

No policy was found related to the avoidance of unrequested increases in credit limits. 

2. Debt Warning 

The bank requires customers to read its ‘Personal Banking Guide’ before buying a product – this includes details of credit checks, warns about careful budgeting and recommends payment protection plans to help against unforeseen financial difficulties. 

Customers in Northern Ireland are given a warning about home repossession resulting from failed repayments on mortgages or other secured loans. 

No warnings were found on the consequences of failing to make payments on unsecured loans. No evidence that the bank avails of the FSA Debt Test was found either. This facility is designed to help customers find out whether they have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulties. 

3. Debt Management and Advice 

Options offered to customers experience difficulty making payments include possible regular or fixed repayments for debts, reducing or suspending repayments for a set time.’ 

The bank refers customers to free advice services including the Citizens Advice Bureau and the Consumer Credit Counselling Service (CCCS). 

The bank states that it offers up to two payment breaks per year (up to two months) on personal loans (unsecured). It further states that payment free month(s) must be selected prior to completion of a loan and that the monthly repayment amount will increase as a consequence. No similar service was found for secured loans (mortgages). 

Similarly, no information was found regarding re-housing advice or liaison with organisations such as Shelter and the Citizens Advice Bureau to work out re-housing arrangements with mortgage customers facing repossession. The bank does not outline the steps leading up to repossession of property/court action.

No pledge to make business operations carbon neutral was found.

No evidence of policy found with regard to gender, race or sexuality. However, the bank reports that it employs people with disabilities. Its Customer Operations has a long track record of recruiting people with a disability and in recognition of this was awarded the 'Overall O2 Ability Award Best Practice - Private Sector' Company in 2006.