Morning business news - January 7Monday 07 January 2013 10.50
PERMANENT TSB TO INCREASE LENDING SIGNIFICANTLY - Permanent TSB yesterday announced plans to increase its lending to Irish borrowers this year to €450m from €90m last year. The bank is state controlled and was bailed out by the Government, with an injection of €1.3 billion. This was out of a total of €4 billion for the Irish Life and Permanent Group, to which it used to belong.
Jeremy Masding, the chief executive of Permanent TSB, says the bank is seeing demand for credit and it is now ready to lend to people. But he stresses that PTSB will only lend to those who are credit worthy. He says that 2012 saw the bank establish its Asset Management Unit to manage problem loans, while it also reduced its cost base and worked on its restructuring plans. In 2013, Permanent TSB is ready to play its part in the growth of the Irish economy, Mr Masding says. He adds that he is getting ''great support'' from the Finance Minister and the Government for the bank's plans. Permanent TSB is seeking to increase its credit card book and the bank's chief executive admits its credit card operation is small compared to its peers and the other products in its portfolio. He says the bank is ''excited'' about getting back into the credit market. The bank also plans to offer mortgages of up to 90% loan to value and Mr Masding says borrowers have to show they have the capability to meet the repayments.
The Permanent TSB chief executive says he is aiming to return the bank to viability and profitability and says he has set himself a target of being out of state hands by 2016. Jeremy Masding says that the bank is currently having ''better and different'' conversations with its customers as its mortgage book continues to stabilise. He says the bank has invested significantly in capabilities and people to deal with its arrears problems.
MORNING BRIEFS - Traffic statistics for Aer Lingus show that it flew 734,000 passengers last month - an increase of 7.2% on December 2011. Short haul passengers made up 658,000 of the total, an increase of 6.5% on December the previous year. Its long haul passengers last month were 76,000, an increase of 13.4% on December 2011. The airline's load factor increased as capacity fell.
*** The Bord Gáis Energy Index fell 2% last month. It said that last year Brent crude recorded its highest ever annual average price as sanctions against Iran and conflict in the Middle East / North Africa region resulted in the loss of 1.7 million barrels per day of crude production. It said though that this year, an increase in US oil production has the potential to ease the oil supply anxieties experienced in 2012. Growing US oil production has been described as a potential 'game changer' that could reduce the world's reliance on oil from other regions.
*** The Small Firms Association says that late payments are strangling small business. Today the SFA has published a survey which shows that 57% of small firms offer credit terms of 30 days or less; and 68% of companies experience late payments on their credit terms. The average payment days in Ireland is 62. The SFA is calling for a Small Claims Court for Business to be set up, a voluntary prompt payment code and an awareness campaign.