Today in the pressWednesday 12 March 2014 09.53
LENIHAN WARNED AGAINST BANK MERGERS - Former Irish Nationwide chairman Michael Walsh wrote to the late minister for finance, Brian Lenihan, warning him against bank mergers as the financial crisis escalated, according to a letter obtained under the Freedom of Information Act, reports the Irish Examiner. In the letter dated November 28, 2008 - three months after the State bank guarantee was introduced - Mr Walsh claimed that Nationwide had a strong capital position and the best option for its staff and members was that it should be allowed continue to operate as an independent financial entity. “The board believes that the combination of the global credit and liquidity crisis and the undue dependence for such a protracted period at all levels in Ireland on property, make it difficult to develop the non-property elements of the real economy. In this difficult environment, the board was surprised that there was such a focus on a consolidation of institutions. The board wondered whether sufficient consideration had been given to the implications of merging institutions at this stage.” Mr Walsh cited pitfalls of merging institutions including management being diverted by integration issues, which will inevitably lead to higher loan losses. By merging institutions, there will be a smaller pool of deposit taking institutions, which leads to concentration risk and could lead to a flight of deposits.
O’BRIEN-BACKED SPRITZ CLOSE TO $3.5m FUNDING TARGET - Spritz, a technology start-up backed by telecoms billionaire Denis O’Brien, is close to sealing a $3.5 million (€2.5 million) seed fundraising round. The Boston-based technology firm allows readers to read novels in hours by streaming words quickly and allowing them to read more easily on small devices such as smart watches or other wearables, says the Irish Times. Spritz said it had already closed the first $1 million of this round, with backing from Mr O’Brien and a number of other angel investors, including Tom Hunersen, a former director of IBRC. Spritz has not disclosed the size of individual shareholdings in its business, but Mr O’Brien’s investment gives him a position for a representative on its board. Spritz was co-founded two years ago by serial entrepreneur Frank Waldman. Mr Hunersen became an adviser to the firm in March 2013, after the former Anglo Irish Bank was placed into liquidation. Spritz said it had been contacted by 10,029 developers interested in incorporating its product into their businesses in only a month.
ZURICH'S IRISH UNIT TARGETED IN GLOBAL INSURANCE FIRM'S PLAN TO SHED 800 JOBS - Zurich Insurance's Irish unit will be among the worst hit by a new spate of job cuts, the Irish Independent has learned. The global insurance group employs more than 55,000 people worldwide, providing insurance services in more than 170 countries. But this week it announced that 800 jobs will go in a bid to boost profits. However, it is understood that Ireland, the UK and its Swiss HQ have all been targeted to bear the brunt of the planned job losses. Zurich is one of Ireland's biggest insurance firms, with 1,000 employees - most of which are based at its office in Blackrock, Co Dublin. Exactly how many of these will be affected is not yet clear. A company spokeswoman said consultation with employees was at an early stage. The cuts should save an annual €250m by the end of 2015, Zurich said, adding that services to customers will not be affected.
POT BOOM PROMPTS US MARIJUANA INDUSTRY TO GO ON RECRUITMENT DRIVE - Colorado’s budding legal marijuana businesses are starting to sprout jobs and hundreds of people hoping to work in the weed business are lining up for the industry’s first employment fair, says the Financial Times. Fifteen companies looking to recruit about 100 workers will attend the event in Denver on Thursday, says Todd Mitchem of OpenVape, the company organising the fair. Would-be applicants are travelling from as far as Georgia and Illinois to deliver their CVs for jobs ranging from “budtenders” and store managers to book-keepers and customer service representatives. The pot boom is reverberating from Denver to Florida as a wave of companies rush to meet demand following the legalisation of recreational marijuana in Colorado and Washington. Colorado raised its forecast for 2014 tax revenue from recreational and medical pot to $134m, well above the previous estimate of $67m. On Monday, the state said it collected $2m in taxes on recreational sales in January.