Morning business news - May 3Friday 03 May 2013 13.16
ULSTER BANK SEES FALL IN LOAN LOSSES - Loan losses and provisions, the amounts being set aside to cover expected losses, are falling at Ulster Bank.
First quarter results for the bank, which is a subsidiary of UK lender RBS, show impairment losses over the period came in at £240m or €282m compared to £394m - that's €472m in the same period in 2012.
ECB RATE CUT MAY HAVE LIMITED IMPACT - The European Central Bank cut its main refinancing rate yesterday, responding to bleak economic prospects for much of the recession-hit euro zone. Echoing similar comments he has made in the past, ECB president Mario Draghi said the bank remained 'ready to act if needed'.
Owen Callan, senior dealer with Dankse Bank Markets, said most lending in Europe, bar tracker mortgages, would be impacted by the rate cut as it was tied to the Euribor rate, rather than to the ECB base rate. He said the cut was a positive for the Irish economy but there was a limit to what it can do and it will largely only improve things “around the margins”.
When asked about the possibility of negative interest rates, he said it was important for the ECB to put that idea out there to show there was no limit to the measures being considered; however such a policy has not always worked when implemented in other countries.
SWEDISH FIRM KEEN FOR IRISH INVESTMENTS - Having recently provided a €65m loan to Irish energy company Gaelectric, the Swedish investment vehicle Proventus says it is "actively evaluating further investments in Ireland and hopes to be able to fund additional mid-sized companies".
And the Irish Times this morning quotes Proventus chief executive Daniel Sachs saying it has not earmarked a specific figure but investment in Ireland could reach "a few hundred million" euro over a period of years.
DISNEY SHARES CLIMB ON IRON MAN SUCCESS - Box office receipts in its home market, the US, have slid 12% this year but Disney is on a high thanks to record-breaking performance from its latest film release; ‘Iron Man 3’.
It is expected to take in $160m when it opens in the US this weekend (though it has already been released in Europe). Overnight the film was confirmed as having just set a record in China for the highest opening weekend sales of $21.5m. That news saw Disney shares climb 1% on Wall Street. They are up 28% year to date.
Disney took the innovative step of filming extra scenes in Beijing with a number of well-known Chinese stars and releasing a completely different version of ‘Iron Man 3’ specifically for China. That seems to have paid off.