Friday 20 April 2018

What it says in the papers: business pages

Paul O'Donoghue

Here are the main business stories from this morning's papers:

Irish Independent:

***Senior staff who worked for Bernard McNamara were snapped up by Nama receivers and rival building firms after his empire collapsed, the Longboat Quay developer told the Oireachtas Banking Inquiry.

The controversial builder, who went bankrupt in 2012 with debts of €2.7bn, defended the quality of his companies’ boards and the structures of his former businesses.

“Directors were mainly qualified and experienced accountants, engineers and chartered surveyors,” he said.

***Two of Ireland’s biggest employers are reported to be in merger talks, with potential implications for as many as 6,000 jobs here.

Dell, the world’s third-biggest personal computer maker, is understood to be in talks to combine with all or part of computer data storage giant EMC. A takeover offer would cost Dell around $50bn.

Over 5,300 people are employed by the two companies in Ireland at major sites in Dublin, Cork and Limerick, with another 700 at EMC-linked VMare in Cork. It is not yet known what effect, if any, the possible merger would have on the companies’ Irish operations.

***EirGrid has scrapped plans for a massive high-voltage overhead power line running across six counties and there are major doubts about a second pylon project.

The company has announced that the Grid Link project between Cork and Kildare will not go ahead, and revealed that a second scheme called Grid West will only proceed if a large-scale wind farm in the west secures planning permission.

Chief executive Fintan Slye said the case for building the 100km Grid West line would change if a 112-turbine Oweninny wind farm planned for Bellacorick in Co Mayo was refused permission. The €600m renewable energy project, proposed by the ESB and Bord na Móna, is currently with An Bord Pleanála and a decision is expected later this year.

Irish Times:

***Finance Minister Michael Noonan is to wait until after next week’s budget to announce a new Central Bank governor, the Irish Times reports.

According to the newspaper Mr Noonan had been expected to bring a name to cabinet this week. However, it is now thought that the appointment process may not be finished until the week after next.

The two candidates thought to still be in the running to replace the outgoing Patrick Honohan are general secretary of the Department of Public Expenditure Robert Watt and Trinity College professor Philip Lane.

***Central Bank rules that cap mortgage lending at 80pc of the value of the home, or 90pc in the case of first time buyers, are causing “wider issues” in the housing market, it has been claimed.

Figures from the banking and Payments Federation of Ireland show a decline in mortgage approvals and drawdowns for the first time in two years.

Goodbody chief economist Dermot O’Leary said: “With house prices up nationally over the past year, the Central Bank rules are clearly restricting the amount of credit available.”

***The chief executive of AIB has said that the organisation will be in a position to repay a “sizeable chunk” of capital to the State in the “not-too-distant future”.

Speaking at the Dublin Chamber of Commerce annual dinner last night CEO Bernard Byrne said: “The Minister for Finance will determine when and how the bank return more capital to the State through an initial public offering, but you can be assured that we will be ready.”

AIB and its subsidiary ESB received a bailout worth almost €21bn from the State following the financial crash. Mr Byrne said that “in time” the State would recoup all of the money put into AIB.

Irish Examiner:

***The cost of rents charged by landlords has now eclipsed those seen during the boom and motor insurance costs continue to rise even as the price of a host of other goods has fallen.

New figures from the Central Statistics Office show that the overall inflation of all economic goods and services fell by 0.5pc last month and were down by 0.3pc in the year to September.

The huge drop in crude oil prices has led to drops in the cost of a range of consumer goods and services, such as food and transport, however the price of private rent and insurance continues to rise.

***Former Central Bank director Fiona Muldoon has been confirmed as the CEO at troubled insurance firm FBD, a move that has been widely welcomed by analysts.

Ms Muldoon took over as interim chief executive earlier this year as the insurer has battled an unprecedented rise in the cost of claims that contributed to losses of €96.4m in the first six months of the year.

Ms Muldoon was formerly the director of credit institutions and insurance supervision at the Central Bank from August 2011 to May 2014.

***Irish airline CityJet has announced two extra routes from Cork airport and is looking to close a deal with a major European carrier in the coming months, following the deal struck with Scandinavian Airlines earlier this week.

The Dublin-based carrier is to operate two new routes from Ireland’s second largest airport to France beginning next June as part of a wider European expansion.

Executive chairman Pat Byrne said that the company is talking to two other European airlines with the aim of securing a similar arrangement to the wet lease contract recently agreed with Scandinavian Airlines.

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