Morning business news - November 14Wednesday 14 November 2012 11.34
SMALL BUSINESSES FEELING ISOLATED FROM BANKS - Just before new figures revealed that a total of 57 employees of the state owned Irish Life and Permanent TSB earned salaries of more than €150,000 last year, another section of the Dáil last night heard how banks are lending to small business. The Oireachtas Committee on Jobs, Enterprise and Innovation also heard how 2,000 credit applications are approved every week; and how 60% of loan applications are being processed within 15 days.
The head of the Credit Review Office, John Trethowan, attended the meeting and he says that his office has written to the bosses of the major banks to try and improve the length of time it is taking some loans to be dealt with. He says his office needs more staff to help it cope with its increased workload, but adds there will be no more recruitment until a review of the CRO is complete. The office currently has eight employees. He says the office's duties may be widened as a result of the review.
Mr Trethowan says that banks are continuing to lend to viable businesses, but more needs to be done for the more marginal businesses. He says he held a workshop recently in Croke Park and this workshop heard that businesses are feeling increasingly remote and isolated from the banks. He says that when loan applications are taken at branch level, they are sent up to Dublin to be processed. This angers people, he adds. He also says the fact that a lot of banks are closing branches around the country is making it harder to small businesses to get vital access to credit.
MORNING BRIEFS - Writing an opinion piece in today's Irish Times, Princeton University's Ashoka Mody - who also was a deputy director in the IMF's research department - says perpetual austerity seems destined to fail. He says alternatives include spreading the debt burden across the euro zone members, or asking private lenders to share the pain.
*** United Drug, the healthcare services company, said its revenues were up 5% this year at €1.8 billion. Profit before tax rose by 11% to €75.8m. Chief executive Liam FitzGerald said the firm now serves providers and patients across 22 countries. Over 70% of United Drug's operating profits were generated outside Ireland with 27% now coming from the US market.
*** Oil company Tullow said its performance in the second half of 2012 to date has been strong. In Ghana, it said that production capacity has been enhanced, while in Kenya, a second exploration well successfully encountered oil. More exploration drilling and testing results across its Kenyan and Ethiopian acreage is expected before the end of the year.
*** National Irish Bank closes its 27 branches and rebrands as Danske Bank today. NIB customers will now have to use post offices - or phone or internet banking - or use one of the bank's new advisory centres, previously described as booths. 100 jobs will be lost because of the branch closures.
*** Sainsbury, Britain's number three supermarket, beat expectations today with a 5.4% rise in first-half profit. The supermarket group said profits were boosted by the development of its online and convenience stores business, the two fastest growing grocery channels in the UK. The group, which has enjoyed 31 consecutive quarters of underlying sales growth, is continuing to outshine industry leader Tesco, which last month posted a 12 per cent fall in first half UK trading profit.
*** Financial services group IFG has said that its group performance is on track and its core businesses are performing well despite the challenging economic conditions. In an interim management statement, the company noted that market conditions remains difficult in Ireland as the economy remains depressed.