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Irish report
by Euro Reporter
2015-03-01 11:28:19
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Bank of Ireland reports pre-tax profit

Bank of Ireland made a pre-tax profit of €921 million, according to full-year results published on Friday. This was an improvement of €1.5 billion on the previous year and marked its first annual profit since the financial sector here crashed in 2008. The bank had made a loss of €564 million in 2013. It said all divisions of the bank are now profitable and its total income rose last year by €300 million. Its net interest margin rose to 2.11 per cent from 1.84 per cent while its cost-income ratio declined by five points to 55 per cent. Its total costs were broadly flat. The bank said it completed €10 billion in new lending last year, an increase of more than 50 per cent. Its defaulted loans reduced by €2.8 billion to €14.3 billion, some 22 per cent below the peak. In Ireland, excluding its Irish tracker mortgages (which reduced by €1.5 billion), total new lending of €5.7 billion exceeded repayments and redemptions. “We were the largest lender to the Irish economy during 2014,” the bank said. In the UK, its new mortgage lending more than doubled to €2.3 billion in 2014.

Overall, net loans and advances to customers were €82.1 billion at the end of December, a net reduction of €2.4 billion on a year earlier. Redemptions, repayments and loan sales across the group totalled about €14 billion last year. “Our actions to reduce defaulted loans, repayments in our Republic of Ireland mortgage tracker book and the rundown of our non-core GB business banking/corporate banking books, together accounted for more than €3 billion of this figure,” its chief executive Richie Boucher said in his review of the business. In terms of its mortgage arrears customers, Bank of Ireland said that more than 90 per cent of its owner-occupiers with restructuring arrangements are meeting their repayments. A similar figure applies for its business banking borrowers. “Our defaulted loan volumes continued to fall - by €2.8 billion in 2014 and by €4 billion from their reported peak in June 2013,” Mr Boucher said. “We anticipate further reductions in defaulted loans in 2015 and beyond with the pace being influenced by a range of factors.” Mr Boucher said 2015 saw a mortgage provision reversal in the Republic of €280 million.

“Our total impairment charge reduced by €1.2 billion relative to the prior year,” he added. “This reflects lower customer loan impairment charges of circa €840 million, a provision reversal of €280 million following changes to our Republic of Ireland mortgage collective provisioning assumptions and the reversal of an impairment charge previously taken on NAMA [National Asset ManagementAgency] subordinated debt of €70 million.” Customer loan impairment charges were reduced across all asset categories. Excluding the mortgage provision reversal, the impairment charge would have reduced to 90 basis points during 2014. “We expect this charge to continue to progress toward normalised levels,” Mr Boucher said.


There’s no shysters – you’re not wanted

Lucinda Creighton and mortgage broker Karl Deeter have presented a code of conduct prohibiting “cronyism” for members of a new party, to a south Dublin crowd of more than 150 people. Mr Deeter, of Irish Mortgage Brokers, who drafted the code, said he was not a member of any party but was happy to assist politicians who asked for his help. “There’s no shysters. You’re not wanted. If you’ve a crony inch in your body, get out. If you want to be a cute hoor, there’s a place for you. It’s just not ever going to be here,” he told the crowd. Ms Creighton said she was tired of the cronyism she had seen at first hand in public life and she wanted to lead the charge in delivering change. Her fledgling grouping, currently known as “Reboot Ireland” – and which is due to be officially launched as a party in March – held a meeting for people who had registered. The event took place in Tara Towers Hotel on Merrion Road in Dublin 4, which is in Ms Creighton’s constituency.

“This transformation is urgent. We have been through seven years of crisis management period and we are emerging from it with nothing changed. We have to ensure we don’t allow these same mistakes to happen again, we owe it to future generations.” The code of conduct was distributed, giving potential party members “an idea of the type of behaviour we would like to encourage”. Under the code, members agree to “refrain from engaging in rumour and political point scoring based on rumour” and to take full responsibility for their words and deeds, “be they good or bad”. The code also requires members to conduct themselves with “the highest moral and ethical standards” and act in a manner “which promotes positivity in politics”. It requires them to “truthfully and faithfully” represent those who seek their assistance and be guided by “compassion, tolerance and fairness”.

Supporters were asked to sign the code and bring it to one of a series of team meetings taking place in March and April. Financial adviser and commentator Eddie Hobbs said he came from “a long line of dissenters”. The State was “broken” and people had moved from “anger to total and utter intolerance”, he said. “The Irish political process is arguably the most dysfunctional in the whole world . . . the Oireachtas might as well be out playing golf,” Mr Hobbs said. Independent Offaly-based councillor John Leahy said running as an Independent would be the “easy” option for Ms Creighton and himself. He said the new party would have a national focus and would not be concentrating on delivering to local interests.


Ireland will do 'all we can' to keep the UK in the EU

UK membership of the EU was in “fundamental Irish national interest”, and would adversely affect the whole EU, the Irish Ambassdor in London told EurActiv. Ireland will do “all that we can” to ensure the UK remains in the EU, stated Dan Mulhall. “A British exit would inevitably weaken the Union, which is something that cannot be in Ireland’s interests,” said the diplomat. The UK shouldn’t expect other member states to be “indifferent” or “tight-lipped” on the referendum debate because “it concerns the future of a Union to which we all belong”. Mulhall said Ireland would back reforms that make the European Union “work better”, but warned now was not the time to engage in “radical treaty change”. “I don’t think full blown treaty reform is appropriate or desirable at a time when Europe is emerging from the deepest recession in its history,” said Mulhall. “The Union needs to focus on economic recovery. Now is not the time to embark on ambitious programme of treaty change.”

Ireland is in the unique situation of being the only member state to share a land border with the UK. Mulhall said it would be “very unwelcome” were this to become an external EU border. Mulhall said “practical solutions” would need to be found to stop the border becoming a barrier to trade and movement. He does not expect the change to negatively impact the peace process in Northern Ireland, but that any uncertainty was best “avoided”. Speaking later at University College London’s European Institute, Mulhall said that shared membership of the European Union had helped relations between Ireland and the UK. He also remarked on the unique situation that the European Parliament presented of Loyalist and Unionist MEPs from Northern Ireland working alongside each other to get the best deal for the region.

Despite the economic hardships experienced by Ireland over the past six years, events “have not significantly dimmed public recognition in Ireland of the advantages of membership”, said Mulhall. Nor was there a “meaningful body of opinion in Ireland that yearns for an exit from the EU”.

The country also has no populist parties seeking to exploit the issue of immigration. Something Mulhall is “proud of”. Ireland’s history of emigration may have played a part in the Irish people “not being keen to place the blame on other people”, said Mulhall. There has been criticism from fellow member states about Ireland’s low levels of corporate taxation. At 12.5%, it is viewed, especially by Britain and Germany, as unfair competition. The issue of tax rates across member states came to the fore with the recent Lux Leaks revelations. Mulhall was bullish on the topic saying “This is a matter of national competence. It is a vital part of what Ireland does to attract foreign investment,” adding that the tax rate was only one of a number of reasons foreign companies invested in Ireland.


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