What it says in the papers: business pages
Published 29/07/2015 | 07:04
HERE are the main business stories from this morning's papers:
***The head of Permanent TSB is facing calls to resign as families who lost their homes in a mortgage overcharging scandal were offered just €50,000 in compensation.
Borrowers affected by the bank’s errors were told to seek expert advice before accepting the “insulting” offer.
Permanent TSB, which is 75pc State-owned, will need at least €80m to cover potential fines and compensation.
***The Coalition’s flip-flopping on water charges has backfired spectacularly – with implications for several future budgets.
The EU has ruled any funding the utility draws down to pay for upgrades will be counted as borrowing by the Government.
Among the reasons cited by the EU statistical agency for Irish Water failing the test was “considerable Government control” over the company.
***One of the biggest private equity firms in the world has signed up with the Government to provide half a billion euro worth of financing to housebuilders that could see 11,000 new homes come on stream.
KKR will join with the Ireland Strategic Investment Fund (ISIF) to create Activate Finance. Since the crash, home builders have struggled to get access to capital to build badly-needed homes.
Most of the banks will only lend up to 65pc of the value of any development project. Under the terms of this deal however, Activate Finance will make available up to 90pc of the value of new construction projects.
***A €90m deal with Warren Buffett’s Berkshire Hathaway allowed State-owned insurer VHI to meet Central Bank capital rules without tapping the exchequer.
The raise bring’s the company’s capital reserves to €540m, which meets the solvency requirements of the Central Bank. VHI’s rivals have pressed for it to become a regulated entity for years as this requires the firm to have a certain level of reserves and puts it on a level playing field with its rivals.
Yesterday the insurer also announced an after tax surplus of just under €50m for 2014, down from the €65m surplus the previous year.
***New studio apartments available for rent only could be built in Dublin in an effort to lower building costs if proposals for the next city development plan are accepted by Dublin city council.
The proposed draft development plan would allow up to seven per cent of units in developments of 100 homes or more to be just 45 square metres, 10 square metres less than the current minimum size.
Construction of the complexes would only be allowed in the inner city or docklands and must be in single ownership for at least 20 years, during which time they cannot be sold off piecemeal.
***Shares in Permanent TSB rose by 2.7pc after the 75pc State-owned bank reported an underlying profit of €1m for the first half of 2015 and a surplus of €9m in its core retail bank.
However PTSB recorded a loss of €431m when exceptional one off items were taken into account. These related to the selling off of non-core assets and a €52m financial hit associated with the bank’s repurchase from the State of so-called contingent convertible capital notes.
The results were issued a day ahead of schedule due to the announcement of a mortgage redress programme for almost 1,400 customers following enforcement action from the Central Bank.
***At a guide price of €30m-plus, Cork’s Clarion Hotel is the most valuable hotel in the country to come on the market outside of Dublin since the economic crash, the Irish Examiner reports.
The 191 bed hotel is expected to attract strong interest at home and abroad after being put up for sale by Nama due to high occupancy rates, bad rates and profitability.
Joint selling agents Savills and JLL say that the hotel, which is operated by Choice Hotels Group and has an annual rent of €2.4m, represents a 7.66pc return to investors.
***Stripe, the online payments company founded by Limerick brothers Patrick and John Collison, has raised fresh funding that values the startup at €4.6bn ($5bn).
Chief executive Patrick Collison said that the five-year-old firm has taken new investment from Visa, American Express and venture capital company Sequoia Capital.
The new investment round, which the company says is “less than $100m”, brings Stripe’s overall funding to over €200m since it was started in 2010.
***Outsourcing firm Abtran, which operates the helpline for the Revenue’s local property tax (LPT) has received fees of almost €10m for providing the service since 2013.
Abtran received fees of €1.274m for the first six months of this year which followed fees paid to the firm of €8.23m between March 2013 and December of last year, giving an overall total of €9.5m.
In 2014 alone, Abtran received fees of €4.65m for providing the helpline service.