CENTRAL BANK THREATENS TO DELAY LAUNCH OF CREDIT UNION DEBIT CARDS - The Central Bank has threatened to delay the launch of an alternative to bank current accounts by 11 credit unions, despite the initiative being announced yesterday.
The eleven credit unions revealed plans for a new Mastercard debit account to be launched in mid June. However the move looks likely to be delayed, after the Central Bank said the group would need approval for “an appropriate transaction account” in order to launch the debit card service, says the Irish Times. The Central Bank said late yesterday that the product, and associated fees and charges, have not been approved, and that the provision of debit cards must be supported by an appropriate transaction account. While the regulator noted that such a full service payment account service has been recently developed by the Registry of Credit Unions, “to date no credit union has been approved”. “We are currently progressing a number of applications. None of the credit unions mentioned have made applications to date,” the regulator said in a statement, adding that as of today it will commence “formally engaging bilaterally with the credit unions involved in relation to this announcement”.
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STATE-BACKED SME LENDER BLUEBAY SEEKS EXTRA TIME TO INVEST ITS FUNDS - The State-backed lender BlueBay Asset Management needs more time to fully invest the €450m it raised to lend to Irish business in 2013, in the latest sign that massive efforts to source non-bank credit for SMEs has yet to catch on with business borrowers.
BlueBay raised €450m, including from biggest backer the National Pension Reserve Fund (NPRF), with a target to lend the cash over five years. The lender is focused at the bigger end of the small and medium enterprises (SME) market, advancing term loans of between €5m and €45m to Irish companies. Its deals have including helping fund TV3's acquisition of its own loans at a reduced price from the liquidators of the former Anglo Irish Bank. So far €300m has been loaned to businesses, the Irish Independent understands. That leaves the business sitting on a big cash pile, made up of €150m of the original fund along with cash from the early repayment of some loans, including TV3's when that business was sold to Liberty Global. BlueBay's Irish fund was set up with a seven-year life span, which meant it was likely to lend out cash over five years and return the cash and profits to investors at the end of the seven-year cycle. The fund can make new business loans, buy loans from banks that are exiting the market or refinance loans for clients.
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HOME LENDING 'ABNORMALLY LOW' DESPITE SPIKE IN APRIL - The country’s chronic housing shortage is set to persist and push property prices even higher while, at the same time, the Central Bank’s mortgage rules continue to restrict lending to ‘abnormally low’ levels despite a pick-up in April.
New figures released by the Banking and Payments Federation of Ireland show a 35% year-on-year increase in the value of mortgage approvals during the month. A total of 2,978 approvals worth €573m were recorded with a near 50% rise in first-time buyers which accounted for €317m worth of lending, writes the Irish Examiner. Analysts called the sharp increase as exceptionally strong and “a pleasant surprise” but warned that the spike came on the back of a relatively weak opening quarter of the year. Reacting to the latest figures, Professional Insurance Brokers Association chief operations officer Rachel Doyle again called on the Central Bank to ease the lending restrictions it introduced last year which she described as restrictive and argued are limiting lending to abnormally low levels. “Our Central Bank rules, by imposing both a loan-to-income and a loan-to-value threshold, make us an extremely restrictive regime,” said Ms Doyle. “Other jurisdictions have variations of these but are not as extreme, generally one or the other,” she added.
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AUSTIN REED CLOSURE COSTS 1,000 JOBS AND CASTS SHADOW ON BHS RESCUE HOPES - Austin Reed, whose suits were once worn by celebrities and dignitaries from Winston Churchill and The Beatles to Christine Lagarde, became the latest casualty of a brutal shake-out of British retail after administrators failed to find a buyer.
The retailer’s 120 stores will close by the end of June, triggering the loss of 1,000 jobs and ending more than 100 years on UK high streets, says the Financial Times. Austin Reed fell into administration last month, in the same week that department store chain BHS collapsed. Administrators for BHS, which has 164 stores and about 11,000 employees, are scrambling to find a buyer to prevent it also being liquidated. Richard Hyman, an independent retail analyst, said that the Austin Reed failure “leaves BHS under a dark cloud”. AlixPartners, Austin Reed’s administrator, said that “no viable offers were received” for the retailer, meaning it had been forced to “implement a managed wind-down process of the estate”. AlixPartners sold five Austin Reed concession stores operating within Boundary Mills shopping outlets to Philip Day’s retail chain Edinburgh Woollen Mill, saving 28 jobs. Mr Day’s group also bought the Austin Reed and Country Casuals brands. But despite initial interest from several parties, the administrator said it was not able to find a buyer for the whole business.
