Tuesday 28 February 2017

What it says in the papers: business pages

Paul O'Donoghue

Here are the business stories you need to know about this morning:

Irish Independent:

***Northern Ireland is to slash its corporation tax rate to 12.5pc in a move that will put the North in direct competition with the Republic for inward investment and jobs.

Political leaders in Belfast have been handed the power to cut the rate of tax businesses pay on their profits from 2018.

The deal surrounding corporation tax was secured as part of the Stormont House Agreement, which has brought an end to the long-running political impasse that pushed power-sharing to the brink.

***Ireland might have avoided a bailout had the European Central Bank been more vocal in its support for the country, outgoing Central Bank Governor Professor Patrick Honohan has claimed.

Prof Honohan (below) said that had Frankfurt convinced the international money markets at the time that it would assist Ireland for as long as was needed, the Government might have been able to manage without the need for an international rescue package.

But without that support, the Fáil-Green Party government had no choice, the governor argued, in a wide-ranging and lengthy address to the London School of Economics last night.

***Shares in Independent News & Media (INM) surged by close to 8pc in early trading yesterday, after the company reported its first increase in total revenue for eight years.

The country’s biggest media group, which owns news outlets including the Irish Independent, reported a 1.1pc increase in total group revenues for the January to October period.

In an upbeat interim management statement, the company said that total advertising revenue grew by 3.7pc. This was boosted by a 43.6pc hike in digital advertising, which helped offset a 1.2pc decline in publishing advertising sales.

 

Irish Times:

***The unemployment rate has fallen to its lowest level since 2008 as the number of full time jobs increased by 59,400, according to new statistics.

Quarterly data from the Central Statistics Office shows that Ireland’s seasonally adjusted unemployment rate dropped from 9.6pc in the period from April to June to 9.1pc in July to September.

This is up from a rate of 11.1pc in the third quarter of 2011. The overall number of people working in the 12 months to September rose by 56,000.

***AIB is planning to issue €750m in Tier2 capital tomorrow as the bank starts to move on its previously announced capital restructuring.

The Irish Times reports that three teams of AIB executives will meet with investors in London and Frankfurt today. The bank is likely to price the issuance tomorrow or next Monday.

It is expected that the debt will be priced at between 4 and 4.25 cent. Seperately, the bank’s shares fell by 20pc in Dublin yesterday after it announced plans to consolidate its shares by offering one for every 250 held by investors.

***The European Commission has found that Ireland’s 2016 is “broadly compliant” with EU fiscal rules but warned that the country could be in danger of breaching the guidelines next year.

Finance Minister Michael Noonan welcomed the commission’s endorsement of the budget. He added that the risk of Ireland’s expenditure benchmark is “not significant”, although he admitted it highlighted the need for tight spending control.

The positive assessment of Ireland’s plan occurred as the commission told Italy, Lithuania, Austria and Spain that their plans for 2016 are at risk of breaking the fiscal rules.

 

Irish Examiner:

***The cost of servicing bad loans is still too high for Irish banks despite the economic recovery, according to outgoing Central Bank governor Patrick Honohan.

In a speech to the London School of Economics on the Irish financial crisis Mr Honohan said that the country may have escaped the “error” of repossessing large numbers of homes.

The speech is likely to be one of the last made by Mr Honohan as he prepares to step down from his position where he will be replaced by Trinity College economics professor Philip Lane.

***John Malone’s Liberty Global has agreed to buy Cable & Wireless Communications (CWC) in a deal worth just under €5bn.

Digicel, the telecommunications company owned by Irish businessman Denis O’Brien, has identified CWC as its key competitor in its Caribbean markets.

Digicel is likely to now face increased competition once Liberty completes the purchase of CWC.

***Irish bookmaker Paddy Power still expects to increase its 2015 operating profit to show a mid to high percentage increase despite “unfavourable” sporting since the start of July.

In a trading update for the second half of the year the company said revenue rose by 9pc on an annualised basis, in line with expectations.

“Top-line growth for the group has been strong, notwithstanding the comparative period benefitting from both very favourable sports results and the concluding stages of the football World Cup,” it said.

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