The Irish banking recovery script is being ripped up
Not a lot is going according to script in the drama that is Irish banking at the moment. After making real progress in getting Irish banks out of the 'intensive care unit' of the financial crash, the sector is taking on poor shape again.
The problems, some of which are not of management's making, are stacking up.
Finance Minister Michael Noonan confirmed last week that AIB is unlikely to have an IPO this year. The State plans to sell a 25pc stake. Kicking it back to 2017, Mr Noonan blamed market conditions. Even if it goes ahead next year, the State will still own 75pc of AIB, nine years after bailing it out.
Bank share prices were spooked by some of the pledges in the new Programme for Government. The Irish bank least likely to be affected here is Bank of Ireland (BoI). It is not controlled by the State and can resist political pressure to cut variable interest rates and engage to do more write-off deals with borrowers in arrears, etc.
In fact Mr Noonan wanted to assure the banks that it wasn't his Government's intention to introduce legislation forcing them to cut variable mortgage rates. This is a Fianna Fail proposal, not a Fine Gael one.
This assurance gives BoI's Richie Boucher all he needs to keep tinkering around with fixed rates and not cut standard variables. This gives him a clear commercial advantage over AIB and PTSB, which are under the political thumb. PTSB shares tanked during the week and, at €2, are now half of what they were a year ago when investors stumped up €4 a piece for them. The bank has battled hard to undo the damage of the boom years, but it is warning of higher regulatory costs. It still hasn't sold its UK mortgage book and the Irish mortgage market is stagnant.
There are other problems. KBC has yet to decide on the future of its Irish operations and will decide early next year. This could involve selling it or perhaps acquiring another bank in Ireland. KBC is one of the few smaller banks providing some competition to the big two.
But last week allegations surfaced that KBC may have wrongly taken people off tracker mortgages. The Central Bank is already investigating this practice with the main banks, setting aside a couple of hundred million euro to cover any compensation and possible penalties.
With AIB's float delayed, BoI shedding €3bn in value since January, PTSB shares halved in a year, Government policy that looks more hostile towards banks and uncertainty over the future of ownership of KBC, the sector doesn't look like getting back to normality any time soon.
The State has 75pc of PTSB and around €2.3bn tied up in the bank. Offloading any more shares will be extremely difficult in the short term, especially after the scalding new investors got a year ago. The €20bn AIB payday has just slipped further down the road. BoI is the only one that has paid back its State investment, but it is also the bank most immune to State pressure and can charge what it likes on standard variable mortgages. Plus ça change. . .
Tails no longer wagging the dogs in dairy sector
The bust-up between Kerry Group plc chief executive Stan McCarthy and the farmers who supply milk to the Kerry Co-op was probably long overdue. Co-ops have always been very important founding shareholders to the big Irish food plcs - but in the case of both Kerry and Glanbia, the situation has moved on dramatically.
It was traditional that the chief executive of Kerry plc also held the position of managing director of the Co-op. It gave farmers a direct point of contact with the person at the helm of the entire organisation.
But a dispute between the Co-op and its suppliers over the continuation of a special milk price deal pre-empted Mr McCarthy's decision to break with tradition and step down as head of the Co-op.
Mr McCarthy has a €13bn business to run and having a huge amount of his time absorbed in a milk price dispute is simply not the best use of his time for all Kerry shareholders.
Glanbia milk suppliers over in Kilkenny will have watched developments in the south west with great interest.
They aren't happy about the price they are getting for their milk either. Well, nobody is. Siobhan Talbot is chief executive of Glanbia plc and the Glanbia Co-op.
But there are two differences at Glanbia.
First, the Co-op still owns over 30pc of Glanbia plc, compared to Kerry Co-op's 14pc of Kerry plc.
Second, Glanbia farmers sell their milk to a joint venture company called Glanbia Ingredients Ireland (GII). This business is a joint venture between the plc and the Co-op but it provides an additional layer of management between Talbot and the price farmers are paid for their milk.
She doesn't run the milk business, but does run the two organisations that own it.
Kerry farmers may have simply pushed too hard or overplayed their hand and have lost McCarthy along the way. Glanbia farmers may want to take stock of how far they might be willing to push Glanbia management on the ever-souring issue of milk price.
The collapse in global dairy prices is putting huge pressure on farmers. Some of them are heavily borrowed and want more generosity from their co-op/plc to get them through this rough period.
But no serious executive is going to undermine their sustainable business model by digging too deep.
News that directors of Glanbia were paid around €85,000 each last year doesn't help the board's case. The Co-op is now entitled to 10 nominees on the Glanbia plc board instead of 14.
Faultlines are appearing in the old ways of doing things across the sector, from executive pay at the IFA, Ornua or co-ops to the redefinition of the relationship between co-ops and their giant plc offspring.
It seems the tails are no longer wagging the dogs in the dairy sector.
Scottish offshore wind may be for the birds
Eddie O'Connor's Mainstream Renewable Power has run into some potentially expensive sea birds off the Scottish coast. Mainstream's planned £2bn wind farm off eastern Scotland is facing collapse after a state subsidy deal appears to have been terminated.
Unfortunately for Mainstream, the project was delayed by a legal challenge brought by the Royal Society for the Protection of Birds, which says the project threatens the lives of thousands of seabirds.
The development cannot go ahead until the challenge has been resolved, but the delay may have proven very costly after the Low Carbon Contracts Company (LCCC), a body established and owned by the Department of Energy and Climate Change, terminated its subsidy deal for the site.
Mainstream has been caught in the crossfire of a changing mood towards wind energy in the UK. The Scottish authorities are all up for it, but the Conservative government in London seems to have a different view.
It has already cut back massively on onshore and solar energy subsidies and now appears to be training its sights on offshore developments too.
All may not be lost for Mainstream on this one as a new deal might still be negotiated.
In Ireland, onshore remains the big focus with no real push behind offshore developments. But based on initial comments from new Natural Resources Minister, Denis Naughten, in favour of solar and other renewables, the wind might be changing direction on this one too.
Sunday Indo Business