Today in the pressFriday 09 May 2014 09.10
BANK OF IRELAND CHIEF DEFENDS HARD LINE ON DEBT FORGIVENESS - Bank of Ireland chief executive Richie Boucher has defended the company's tough stance on debt forgiveness. Mr Boucher, in an interview with The Irish Times, also questioned recent write-offs being offered by rival AIB to mortgage arrears customers via a pilot scheme operated with the Irish Mortgage Holders Association (IMHO). "We have been consistent [on debt forgiveness]. I am sure, and I know, that's not to everyone's taste but then again how does debt forgiveness arrive in AIB? he asked. "Is there transparency? Is it some type of a lottery where names are pulled out of a hat every morning? I don't know." When asked why Bank of Ireland has not established a similar partnership with the IMHO, Mr Boucher replied: "We think the collection of mortgage arrears should be a core competency in a bank that employs over 11,000 people." Bank of Ireland was criticised last week by Lorcan O'Connor, the head of the Insolvency Service of Ireland, for its "blunt" approach with distressed borrowers. Mr Boucher responded: "Every concession means someone [else] has to pay . . . We have responsibilities to the people who are meeting their mortgages, to depositors [and] to the people who have given us capital." Bank of Ireland also expects that arrears customers who hand back the keys of their property, or agree to a voluntary sale, should repay the residual debt on their loan.
REASONS TO BE CHEERFUL AS CONSUMER CONFIDENCE AND SALES RISE - Consumer confidence has reached a seven-year high as trends show people are starting to spend again, writes the Irish Independent. Sales rose across the board throughout the first three months of this year, while household debt fell, according to the Consumer Market Monitor. And positive gains in how people feel made at the end of last year continued to grow into the start of 2014, with confidence said to be up to 10 points from a baseline of zero. It hit a low of more than minus 30 in mid-2008, the report by UCD Michael Smurfit Graduate Business School and the Marketing Institute of Ireland found. "Looking to the future there appears to be a slight cause for optimism," said Tom Trainor, chief executive of the Marketing Institute. "Disposable income is still a major concern, however, and this of course reflects on when and what they can spend on and this has a knock-on effect on job creation and job preservation. "Combined with other data, such as recent manufacturing and services PMIs, which have all shown positive growth, we hope that this positive growth and momentum will be sustained over the remainder of this year at least." The monitor examines data from the Central Statistics Office (CSO), the Central Bank and the European Commission among others.
ELAN DEAL HITS PERRIGO PROFITS - US drugmaker Perrigo has incurred once-off costs of nearly $285m (€205m) through its takeover of Irish biotech firm, Elan, dragging its current year profits down by nearly 80% so far. The New York-listed company - the leading maker of generic over-the-counter drugs in the US - yesterday reported third quarter net profits of $48.1m for the three months to the end of March, down by 57% on a year-on-year basis. For the first nine months of its financial year (which runs to the end of June), the company posted a net profit of $73.4m, down by 77.3% on the same period last year. A big hit to Perrigo’s bottom line growth came via the one-off costs related to its near $9.5 billion purchase of Dublin-based Elan at the end of last year, writes the Irish Examiner. The acquisition-related costs included administration expenses of nearly $109m, $10m in interest payments and almost $166m lost on extinguishing Elan’s debt. The US firm also paid cash consideration of $16.1m to Elan’s stock option and share award holders for the unvested portion of their awards in the second quarter of its current financial year. The company incurred Elan takeover-related costs of $1.2m for the three months to the end of March. The $285m cost covers the first nine months of its current fiscal year.
WELLCOME TRUST RAISES 'CONCERNS' OVER PFIZER BID FOR ASTRAZENECA - Britain’s biggest medical research foundation has told the government it has “major concerns” over Pfizer’s £63 billion offer for AstraZeneca, as the Wellcome Trust became the latest powerful voice to weigh in over the mooted deal. Sir William Castell, the chair of the world’s third largest charitable foundation, and Jeremy Farrar, director of Wellcome Trust, outlined their concerns in a private letter to George Osborne last Friday as the US drugmaker made its opening offer for the UK firm. Sir William told the UK chancellor that AstraZeneca was “critical” to the UK’s science base and raised doubts over Pfizer’s commitment to investment in Britain, writes the Financial Times. “Pfizer’s past acquisitions of major pharmaceutical companies have led to a substantial reduction in R&D activity, which we are concerned could be replicated in this instance,” said the letter, seen by the FT. Wellcome’s £16 billion charitable endowment is a bedrock of UK science, pouring more than £750m a year into biomedical research. It works closely with industry, including a new genetic research partnership with GlaxoSmithKline, the UK’s biggest drug company. Sir William’s intervention comes as Pfizer mulls whether to return with a higher offer after AstraZeneca last week refused to enter takeover talks. Ian Read, the US company’s chairman and chief executive, is due in London on Tuesday to face questions over the proposed deal from MPs.