Today in the pressTuesday 25 February 2014 10.51
RBS REVIEW UNLIKELY TO RAISE ULSTER BANK CLOSURES - Royal Bank of Scotland is not expected to disclose specific job losses or branch closures for Ulster Bank when it releases the results of its group-wide strategic review on Thursday, says the Irish Times. Instead, RBS chief executive Ross McEwan is likely to outline the strategic direction of the business and some customer-facing initiatives. He is likely to state RBS’s commitment to retail, business and corporate banking in the UK and Ireland, and unveil a major investment in technology designed to regain the confidence of customers following a series of outages over the past two years. One source said there would be no “big bang” announcement by RBS on Thursday. However, this is not to suggest there will be no job cuts or branch closures at Ulster Bank in the next couple of years. Last July, RBS indicated to investors that its branch network here is likely to reduce to between 175 and 185 locations, North and South, from 214. At present, only about 16% of transactions take place in branches, with the balance at ATM machines, online or via telephone or mobile devices. The bank’s view is that while it will retain a national branch network, it can do this from fewer locations.
AER LINGUS WANTS MANY SMALLER SHAREHOLDERS, NOT JUST FEW BIG ONES - MUELLER - The head of Aer Lingus has said that having a mix of smaller shareholders, rather than potential large-scale stake building by a few investors is best for the airline. Aer Lingus would be best served by having a large number of shareholders and not necessarily by Gulf carrier Etihad hiking its stake in the Irish airline above its current near 3% stake, Christoph Mueller said. "Liquidity is key for us and should be for all shareholders because low trading and a low free float is an impediment to our share price potential," Mr Mueller told the Irish Independent, adding that the Aer Lingus management believes that the airline should have "many shareholders" rather than a few large ones. The chief executive was speaking as Aer Lingus reported an operating profit of €61.1m for 2013, an 11.6% fall on 2012. But the figure was in line with the forecast profit Aer Lingus management gave back in September when they issued a profit warning. Aer Lingus had originally expected to make a profit of €69.1m. Revenue edged 2.3% higher to €1.42 billion last year.
NAMA SET TO MAKE PROFIT ON MONEY PAID FOR €1.8 BILLION O'FLYNN LOANS - NAMA is expected to make a profit on the sum it paid for developers O’Flynn Construction’s €1.8 billion in loans in 2010, according to market sources. "There’s a very strong international interest in the loans, with a first-stage deadline for expressions of interest in the middle of March, and they could be sold as early as a month after that. The quality of the assets, spread across Ireland, the UK and Germany has made it very appealing,” the Irish Examiner was told. Although the O’Flynn loan book was valued at €1.8 billion, NAMA never revealed how much it paid to acquire it or what its “haircut” was, but it’s understood that if NAMA now sells the loans for an expected €1 billion-plus, it may represent a profit on what it paid four years ago. The Cork-based company has carried out the restructuring required by NAMA. Developer Michael O’Flynn’s business (set up in 1978) was one of the Top 10 largest development loan books to go into NAMA four years ago, and will be one of the first to exit. At least a dozen international investors are expected to make Tier 1 expressions of interest by March 19, with a smaller number then invited to make firm offers in a second tier of bids. There’s a reported €75m in annual income and rent roll from the assets.
JPMORGAN CHASE TO CUT THOUSANDS MORE JOBS - JPMorgan Chase is planning more job cuts in its mortgage business on top of the 13,000-15,000 positions already due to be slashed because of plunging demand for home loans. Several thousand more cuts are planned, according to people familiar with the matter, and could be announced at JPMorgan’s annual investor day on Tuesday, reports the Financial Times. They are part of a new efficiency drive at the largest US bank by assets that also encompasses staffing branches with fewer employees. Jamie Dimon, chief executive, and his management team are due to address shareholders for the first time since the bank agreed to a record $13 billion settlement with the Department of Justice and regulators to resolve allegations of mortgage mis-selling. Despite two years of giant legal costs and fraught run-ins with regulators, the investor meeting comes at a time when the bank’s share price of $58.03 is close to a record high. Profitability at JPMorgan remains stronger than at competitors such as Bank of America and Citigroup but the bank is looking to find new savings, partly because of technology that allows greater automation of clerical functions in branches and partly because of a plunge in demand for mortgage refinancings.