A ROW has erupted between the finance minister and the country’s two largest banks over the number of mortgage loans that were being approved.

AIB and Bank of Ireland questioned Michael Noonan’s figures on mortgage lending, claiming they had approved a far greater percentage of home loans last year.

The dispute stemmed from statistics showing that 28,501 residential mortgage applications were received by AIB, Bank of Ireland and Permanent TSB last year.

Of these, nearly 40pc, or 10,761, were refused according to the minister’s figures.

The mortgage details for 2011 were provided in response to a parliamentary question from Fianna Fail finance spokesman Michael McGrath.

Mr Noonan told him that given the “commercially sensitive nature of the data” requested by Mr McGrath, he could only provide aggregate application and approval figures.

But the high refusal rate has been disputed by state-owned AIB and Bank of Ireland.

AIB claims that its approval rate of mortgage applications “significantly increased” to 75pc by December last year from 55pc in February 2011.

And the bank’s chief executive David Duffy said that AIB is on track to exceed its stated €1bn mortgage lending target for 2012.

He said that extending credit to mortgage customers and viable small businesses is “vital to this bank’s objectives of supporting economic activity and ultimately achieving a tangible return for the taxpayer”.

AIB said that to date in 2012 it has approved seven out of 10 mortgage applications and that it’s providing 45pc of all new mortgages in the market.

“In July alone, AIB approved mortgages with a total value of €156m — the largest monthly approval rate in almost three years,” the bank added.

Bank of Ireland has also insisted it’s signing off on more mortgage applications than Mr Noonan’s figures suggest.

Refusal

“It is in the bank’s interest to support customers seeking mortgage finance,” a spokeswoman said. She added that Bank of Ireland has received nearly €1.6bn in applications for mortgage finance under a €1.5bn mortgage fund it launched at the end of last year.

A spokesman for state-owned Permanent TSB declined to say whether the bank’s mortgage application refusal rate was in line with the rate indicated by Mr Noonan.

While 17,740 mortgage applications were approved by the institutions last year, the figure pales in comparison with the nearly 115,000 mortgages that were sanctioned in 2006 at the peak of the property bubble.

By comparison, the number of mortgages approved in 1970 in Ireland was 12,500.

– John Mulligan