Today in the pressTuesday 21 May 2013 09.30
DIRECTORS AGREE 10% CUT IN FEES AT PERMANENT TSB - The chairman of Permanent TSB and the bank’s non-executive directors are to take a 10% cut in their annual fees, from June 1st, as the bank seeks to achieve an 8% reduction in remuneration costs across the group. Staff have already been informed that the bank intends to wind down its defined-benefit pension scheme, writes the Irish Times. Chief executive Jeremy Masding is to take a cut in the company’s contribution to his pension scheme as part of the drive to encourage staff to accept a move from a defined-benefit scheme to a defined-contribution scheme. The achievement of such a change is a key part of the plan to reduce remuneration costs. Mr Masding wrote to all staff yesterday outlining his determination to achieve the reduction in costs being targeted by the bank. The chief executive, who received a salary of €353, 000 last year, gets a pension contribution from the company based on his salary. Last year the payment was €50,000. He was appointed to his role on February 28th last year.
RYANAIR IN TALKS TO SIGNIFICANTLY BOOST TRAFFIC OUT OF DUBLIN AIRPORT - Ryanair is in talks to significantly boost traffic out of Dublin Airport after years of reducing capacity in the capital. The airline's deputy chief executive, Howard Millar, told the Irish Independent that the talks would need to be successfully concluded during the summer if it's to begin adding capacity by September. He made the comments as Ryanair reported record annual profits of €569m in the 12 months to the end of March - a 13% increase on the previous year. That catapulted its shares more than 8% higher at one stage and with an almost €10 billion market capitalisation confirmed its position as Ireland's second most valuable company after building materials giant CRH. Ryanair's revenue last year also jumped by 13%, to €4.88 billion, and the company said that it expects to generate profits of between €570m and €600m in the current financial year. Its fuel costs jumped 18% last year to €1.88 billion, while total revenue per passenger climbed 8%.
DUBLIN PUSHED AS 'NON-BANK LENDING HUB’ - The Department of Finance is spearheading efforts to make Dublin a financial services hub for non-bank lending across the eurozone. If successful, the move could create thousands of well-paid front office jobs and play a key role in the development of the eurozone’s economy, writes the Irish Examiner. “Ireland is taking a lead roll in the area of non-bank financing and we have prioritised this issue as part of the Irish presidency,” said a Department of Finance spokesperson. “We would of course see opportunities for Ireland to be in a position to benefit from increased financing and also there may be potential for Ireland to become a hub for such financing. “The roll-out of non-bank financing is still in the early stages but the department will ensure that Ireland remains at the forefront of development.” Since the collapse of the financial markets in 2008, the banking system has been struggling to return to profitability. Most banks across the euro zone are deleveraging, which means they are selling loanbooks and non-core assets to shrink their balance sheets. In this contractionary environment, the flow of credit to the SME sector has been particularly constrained. SMEs create the vast bulk of employment across the eurozone. In the US, 85% of corporate funding is done through the capital markets and only 15% is bank funding. Across the euro zone, it is the opposite, with most corporates heavily reliant on bank funding.
APPLE TAX FALLOUT SET TO HAVE GLOBAL IMPACT - The Financial Times says that the clamour surrounding Apple’s tax affairs in Washington on Monday is set to reverberate around the world in the coming days, following revelations that taxpayers abroad have suffered more than those in the US from the company’s tax avoidance tactics. In one unusual arrangement, Apple cut a deal to pay a corporation tax rate of 2% or less in Ireland over the past decade, far below the usual 12%. It then passed billions of dollars of earnings through subsidiaries in the country, enabling it to escape large tax payments to other countries around the world. All of Apple’s sales outside the Americas are channelled through the country, according to Monday’s revelations, which were contained in a report from the Senate’s permanent subcommittee on investigations. The implications were not lost on politicians in Washington, even though the Senate’s investigation was prompted by purely domestic concerns about a massive leakage of US tax that would otherwise have been paid by some of the country’s richest multinationals. “There’s going to be some shockwaves I believe going through Europe when the other countries see Ireland not even implementing their own tax rates but working out these deals with Apple,” said Carl Levin, the committee’s chairman.