Irish Life & Permanent indicated would further reduce residential mortgage rates, as it came under criticism from customers furious at having to pay more than homeowners at rival banks.

The State-run group’s troubled lending arm, Permanent TSB which is set to be split from its profitable life business won approval from the EU/IMF last month to move bad assets off its balance sheet.

Its chairman acknowledged it must offer more competitive mortgages because some of its 74,500 variable rate customers, who bought shares in the group to protest at todays annual meeting, criticised increases in recent years.

“Many of your customers have endured a disturbing decrease in their welfare thanks to hefty mortgage hikes. They live to pay bills and nothing else,” said Conor McNally, a customer who has fallen behind on €6,500 of mortgage payments.

“You have taken thousands of euros extra from my pocket and family for no good reason, to fund your disastrous lack of foresight … We are struggling borrowers, permanently tied to your predatory bank.”

After a series of increases, PTSB – which has suffered more than most under the weight of loss-making mortgages that track the European Central Bank’s interest rate – cut its standard variable mortgage rate to 4.69 per cent from 5.19 per cent this month.

That compares with the 3 per cent existing customers pay at Allied Irish Banks and the 3.84 per cent charged by Bank of Ireland, the country’s largest lender. Chairman Alan Cook said the bank should be able to make its mortgage products more competitive, but drew jeers when adding he could not commit to a timeframe.

“This needs to be a competitive, mainstream retail bank and we cannot be … whilst offering one rate to new borrowers, when everybody knows the rest of the customer base is paying something higher,” Mr Cook said in relation to a 3.69 per cent rate it offered new customers.

Mr Cook said he regarded last month’s rate cut as “the first step in the journey”.

PTSB Chief Executive Jeremy Masding said he was happy with the bank’s level of mortgage arrears. The bank’s proportion of Irish owner-occupier loans in arrears for more than 90 days rose to 12.1 per cent at the end of 2011, the highest in a sector where the average is 9.2 per cent.

Brought to you by