Saturday 24 August 2019

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:

***A tax fine “will not affect” Apple’s investment here, the chief executive of the global giant, Tim Cook, has promised.

In an exclusive interview with the Irish Independent, Mr Cook ruled out any link between a punitive EU verdict on Apple’s Irish tax status and investment in the tech giant’s Cork facility.

“An adverse ruling will not affect it,” he said. “We were here when it was a very, very small company. We’ve been here through tough times and Ireland stood by us.

***British insurance giant Aviva is considering a sale of its Irish health insurance business, according to sources close to the situation.

A sale would be the biggest in the sector since Aviva’s larger rival Laya Healthcare was sold to AIG earlier this year in a deal understood to have been worth in the region of €90m.

Aviva is Ireland’s third biggest health insurer after VHI and Laya. Smaller rival GloHealthcare, which is owned by US giant AIG, is tipped by insiders as a possible buyer. A deal would catapult it close to second-ranked Laya in terms of market share.

***The Central Bank has proposed rule changes for banks when they are increasing variable mortgage rates.

Under the proposals, mortgage lenders may have to give more than 30 days’ notice if they plan to hike variable rates.

But Brendan Burgess of the Fair Mortgage Rates Campaign said the proposals were “complete nonsense”.


Irish Times:

***Ajai Chopra, the former IMF mission chief to Ireland, has criticised the European Central Bank’s handling of Ireland’s bailout.

In a report for a European Parliament committee Mr Chopra, who worked closely with the bank as it planned Ireland’s rescue package, accused the ECB of prioritising its balance sheet over the needs of the Irish taxpayer.

Mr Chopra’s intervention comes as ECB President Mario Draghi defended the bank’s actions during the bailout, saying that the Irish crisis was “homemade” and was worsened by actions in Dublin before the ECB stepped in.

***’Shadow banking’ in Ireland amounted to just over 1pc of State GDP or €2.25bn at the end of last year, according to a new study.

The analysis published yesterday by the Financial Stability Board in Switzerland defines shadow banking as “credit intermediaries” involving entities and activities outside of the normal banking system.

The study said that going forward improved monitoring of shadow banking is needed in the future “both internationally and in Ireland”.

***Irish property investment firm Hibernia REIT is likely to use a new €400m credit facility to add to its stock of office property in the capital and buy distressed property loans.

The firm announced yesterday that the new €400m facility, to be borrowed from three banks, would replace its existing €100m facility which is due for repayment in August 2017.

The new facility was revealed as the company announced that pretax profits more than doubled for the first half of the year compared to the same period in 2014, rising from €32m to €73.7m.


Irish Examiner:

***Figures published by the Central Statistics Office yesterday show that rents by 0.5pc in October and are up 10.3pc year-on-year, which may have been hiked by landlords to pre-empt rent controls, the Irish Examiner reports.

A range of measures that will see rents effectively frozen for two years was debated throughout the month by Environment Minister Alan Kelly and Finance Minister Michael Noonan.

Investec Ireland chief economist Philip O’Sullivan said that landlords may have brought forward rent increases to avoid Government controls that would have tied rents to the cost of living.

***Irish Ferries owner Irish Continental Group (ICG) is expected to boost its full year earnings before deductions by about €24m to €74m.

The company yesterday announced a strong performance for the first nine months of the year, with group revenue up nearly 10pc to €248.6m.

Last year ICG recorded earnings of €50.5m. Following yesterday’s update davy Stockbrokers said it would increase its earnings forecast for the year from €70m to about €74m.

***Tanaiste Joan Burton has criticised EU spending rules, claiming that they limit the Government’s ability to invest in long-term projects.

She said the rules are holding back capital investment at a time when Ireland can borrow at record low interest rates.

“In that context, it is frankly frustrating that we are prevented by eurozone fiscal rules from doing more in the way of direct investment by the State,” she said.

Online Editors

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