Today in the press

Thursday 27 November 2008 14.19
Today in the press

HARVEY NOT GOING SO WELL IN IRELAND - The Irish Independent reports that Australian retail giant Harvey Norman has compared Ireland's economic downturn to the return of the 'potato famine'.

The paper quotes chief executive Gerry Harvey, who spoke at its AGM yesterday, as describing the performance of his 13 Irish stores as 'catastrophic', adding that he regretted expanding into the Irish market. But he added that the investment was too big to pull out now.

'In Ireland, we are down 25- 40% like-for-like on last year,' he told reporters. 'Ireland is a real worry. I've never seen something get belted like Ireland.'

The Indo goes on to quote Mr Harvey as saying: 'Phew, just imagine you opened in Ireland; you'd want to go and cut your throat. The potato famine, someone said, the return of the potato famine in Ireland.'

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BoI 'HAS MET FOUR ON INVESTMENT' - The Irish Times says Bank of Ireland has held talks with four parties, including US private equity firms Texas Pacific Group (TPG) and Kohlberg Kravis Roberts (KKR), which have expressed an interest in making an investment in the bank.

The paper says the parties include the Irish-led Mallabraca consortium, which includes US private equity firms JC Flowers and the Carlyle Group, and two sovereign wealth funds from the Middle East. Another US private equity company is also in talks with the bank, says the Irish Times.

The paper says the bank has met all four interested parties and has sought further proposals from them before the bank's chief executive, Brian Goggin, and governor Richard Burrows meet Minister for Finance Brian Lenihan tomorrow. Discussions are at an early stage and have not yet reached due diligence, according to the paper.

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NEW VODAFONE CHIEF IN A HURRY - The Financial Times quotes Vittorio Colao, chief executive of Vodafone, as saying that he wants to raise the mobile phone operator's performance, promising that it will become more aggressive and faster during the downturn.

In what the FT says is his first interview since taking the reins in July, Mr Colao said it was vital for Vodafone to become faster at responding to customers' needs and competitors' initiatives.

The paper says that in the UK, Vodafone has been outmanoeuvred by O2 , the mobile operator owned by Spain's Telefónica, which has strengthened its position as the largest UK mobile operator by offering cheap calls packages to less well-off customers in the downturn.

Last year, O2 beat Vodafone to a deal with Apple to be the exclusive UK network for the iPhone. Mr Colao said it was a 'pity' Vodafone did not secure the iPhone in the UK and admitted that may have contributed to the group suffering a higher rate of defections by affluent customers.

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UK BANKS COULD NEED EVEN MORE FUNDING - The Daily Telegraph quotes an economist as saying that Britain's banks will need to raise more capital if the economy shrinks at the same dramatic pace as in the early 1980s.

UBS's respected senior economist George Magnus has warned that losses on loans made to struggling households and businesses will engulf the £50 billion Britain's eight largest banks are raising - £37 billion of which is coming from the taxpayer - if the UK economy contracts by 5% to 6%.

The paper says that although economists currently expect the economy to shrink by 2% to 3% from peak to trough, in the early 1980s the contraction reached 5.9%.

Speculation that banks may have to be fully nationalised is being fuelled by concerns about their capital strength. The suggestion surfaced again yesterday when Alistair Darling said the British government is 'ready to take further action to make sure bank lending resumes'.