Today in the pressFriday 02 May 2014 12.32
RBS MULLS RADICAL PLAN TO FLOAT ULSTER BANK ON THE STOCK MARKET - Ulster Bank could be floated on the stock market under radical changes being considered by owner RBS, writes the Irish Independent. Efforts are currently underway to sell a stake in the bank to a US private equity house or potentially to seek a merger with Permanent TSB. But either move would be a stepping stone to a longer term project to create a much more independent bank, according to people with knowledge of the plans under consideration. Ulster Bank releases financial results for the first three months of the year today. The figures include details of progress made in addressing mortgage arrears and in stemming losses on commercial real estate loans. The numbers will be closely watched as the bank is prepared for a beauty parade in front of potential investors. The Independent reported in February that Ulster Bank was seeking outside investment by selling a stake in its Republic of Ireland unit in an effort to invigorate the bank's status as a "challenger" to AIB and Bank of Ireland. The ultimate goal for the lender is to try to return capital to parent RBS, which is owned by taxpayers in the UK and has bailed out its Irish unit to the tune of €15 billion since the crash.
STRUCTURED PROPOSAL FOR QUINN FIRMS TO BE READY "WITHIN DAYS" - A structured proposal for the former Quinn Group manufacturing companies will be ready "within days", a director of a company set up to buy them has said, reports the Irish Times. Fine Gael councillor for Ballinamore, Co Leitrim, John McCartin, who is a director of QBRC Ltd, (formerly Quinn Business Retention Company Ltd), said the effort to get financial backers had been delayed by the campaign of sabotage against the former Quinn Group businesses. The group, which is now called Aventas, comprises glass, cement, building materials and packaging businesses, in the Cavan/Fermanagh border area, England, and continental Europe. It has 1,190 employees in the border businesses, and 2,800 overall. The Aventas management is working to achieve as much value as possible for international debtors who have agreed to "park" debts of €800 million while the businesses work to service further debts totalling €465 million. The Irish Bank Resolution Corporation owns approximately one-quarter of the group, but its shareholding is of little value given that the debtors have to be satisfied first.
CITIBANK PROFITS DROP 15% AT IRISH UNIT - Pre-tax profits at the main Irish arm of Citibank declined by 15% to $823.1m (€593.2m) last year. The Irish Examiner says that new accounts filed by Dublin-based Citibank Europe show that the bank sustained the drop in profits after its operating income fell from $1.798 billion to $1.732 billion in the 12 months to the end of December last. In the fourth quarter of 2013, the firm paid a dividend of $800m to its parent, Citibank Holdings. The chief executive of the firm is Irishman Aidan Brady. The directors’ report said: "The business environment in which the company operates remained challenging in 2013." Seven of the bank’s board members are Irish. "General uncertainty in the macro-economic environment also impacted corporate confidence and consequently client activity," the report said. "Despite these headwinds, the company had another profitable performance in 2013."Citibank profits drop 15% at Irish unit The bank reported that its operating expenses increased from $803m to $877m “due in part to the introduction of a transaction tax in one of the company’s markets”.
BANK OF ENGLAND WARNS THAT HOUSING BUBBLE IS DERAILING ECONOMY - The Bank of England has given its strongest warning yet that a housing bubble threatens to derail the UK economy, saying that spiralling property prices were “the very brightest [hazard] light” on its dashboard. In a speech in London on Thursday evening, Jon Cunliffe, deputy governor, said the danger signs resembled “a movie that has been seen more than once in the UK”. His speech came after figures from the Nationwide Building Society showed house prices rose at a double-digit 10.9% annual rate in April, sending the pound to a five-year high against the US dollar and intensifying expectations of earlier interest rate rises, writes the Financial Times. Sir Jon has kept his views on the economy and the housing market private since joining the Bank of England last November, but as the head of financial stability he has an influential role in the bank’s policy making. Noting that house building was still lagging far behind demand for property, he said, “there is good reason to believe that a mutually reinforcing combination of strong demand, weak supply and expectations of a rising market could lead to a period of sustained and very powerful pressure on house prices in the UK”.