MERRILL LYNCH SHIFTS $187 BILLION OUT OF IRELAND IN TWO YEARS - Merrill Lynch International Bank (MLIB), Ireland’s largest bank when measured by the size of its balance sheet, shifted a net $84 billion worth of financial assets out of Ireland to the UK over the last year. The total amount shifted by the bank over the last two years is $187 billion, meaning assets roughly equivalent in size to the entire Bank of Ireland group have disappeared from the Irish financial sector since the end of 2011, writes the Irish Times. The figures are contained in the 2013 accounts for MLIB, the main international arm of the giant Bank of America Merrill Lynch corporation, which were filed in recent days at the Companies Registration Office. The directors of the bank, which engages in derivatives and foreign exchange trading from its Dublin base, said it will continue to shift assets out of Ireland over the coming year. “In accordance with its strategic plan, the group transferred its global markets derivatives market risk to an affiliate in January 2014..... Also, the group is currently transferring most of its global markets loan portfolio to other [Bank of America] affiliates during 2014,” the directors’ report said. “The directors and shareholder will continue to evaluate the strategic options for the remaining businesses in the group,” it continued. MLIB traditionally booked all of the wider group’s international derivatives trades in Dublin, even though most of the activity takes place in London.
BANK RISKS LOSS OF 50,000 HOME LOANS AFTER RATINGS MOVE - Ulster Bank is at risk of losing control of almost 50,000 Irish mortgages to bondholders as a result of credit rating downgrades by Moody's. Individual mortgages would not be affected if the accounts - which were bundled together by the bank to be used to borrow on the markets - were taken over by bondholders acting through trustee Deutsche Bank, says the Irish Independent. But homeowners would get a letter telling them of the change. Ulster Bank borrowed against the Irish mortgages during the boom through a process called securitisation. That process saw as much as €10 billion raised by the bank on the market using the mortgages as collateral. As part of that scheme the bank committed to protect the value of the security for the life of the deals - which run until as late as 2047 and 2055 in some cases. Six separate notices were issued on the Irish Stock Exchange on Friday night warning that Ulster Bank had fallen outside the terms of its securitisation agreements which included to "maintain ratings on its long-term unsecured, unsubordinated, unguaranteed debt obligations equal to or greater than BBB by S&P or Baa2 by Moody's". That happened after Ulster Bank's parent Royal Bank of Scotland's (RBS) credit rating was cut from A3 to Baa1 in March.
BEACON LOSSES CONTINUE TO RISE - Losses continued to mount last year at the Beacon Private Hospital with pre-tax losses totalling €8.7m. Newly filed accounts show that UPMC Beacon Hospital Sandyford Ltd - now renamed Beacon Hospital Sandyford Ltd - recorded the losses in spite of marginally increasing revenues, which went from €70.1m to €71.6m, in the 12 months to the end of last June, reports the Irish Examiner. The Beacon generated losses of €9.8m in 2012. The hospital’s struggles coincided with a continuing drop in numbers on private health insurance - there are now just over two million people with in-patient cover, compared with almost 2.3 million people when the market peaked in 2008. Last year’s loss takes account of non-cash depreciation costs of €1.3m. The pre-tax loss also resulted in Beacon’s accumulated losses climbing from €57.14m to €65.86m. In April, it was announced that billionaire businessman, Denis O’Brien had taken control of the Beacon. The hospital - which employs 600 staff and 200 medical consultants - was previously owned and operated by the University of Pittsburgh Medical Centre, an American private hospital operator.
SWEDES HIT JUNCKER'S HOPES FOR TOP EU JOB - Jean-Claude Juncker’s ambitions to be the next European Commission president have been dealt a further blow after Sweden’s prime minister raised questions about the credibility of the process for filling the top job in Brussels, writes the Financial Times. Fredrik Reinfeldt boosted the hopes of David Cameron, UK prime minister, of blocking Mr Juncker when he said he disagreed with the principle that the European parliament, not elected national leaders, should take the lead in making the appointment. Mr Juncker, former Luxembourg prime minister, claims to have a democratic mandate as the lead candidate of the centre-right European People’s Party, the group with most MEPs in the new European parliament. “For me and for Sweden, we have put in question the process itself,” Mr Reinfeldt told the Financial Times, ahead of a two-day meeting of reform-minded leaders including Mr Cameron, German chancellor Angela Merkel and Mark Rutte, Dutch prime minister, at his summer retreat in Harpsund. “We do not support the idea because it would make it impossible for any other candidate and rule out a lot of potential commission presidents,” he said. “We should take care of the balance between different institutions.” Mr Juncker, who favours much closer integration of the EU, has the backing of the European parliament and the public endorsement of Ms Merkel, although Mr Cameron hopes the German chancellor will ultimately agree to find an alternative compromise candidate.