FEARS OF US RECESSION WIPE €4bn OFF PRIVATE PENSIONS - The pension funds of Irish private sector workers have shed €4 billion of their value in the first two weeks of the year alone, it emerged last night says the Irish Independent. The losses this year so far match the damage done to private pensions for all of 2007. Fears of a recession in the US and the worsening international banking crisis have triggered day-after-day losses on international markets over the past two weeks. This has meant that between 3% and 4.5% has been wiped off Irish managed pension funds in the past fortnight, according to Noel Collins, a senior consultant with pensions advisers Mercer. The highest losses have been suffered by those funds with the largest exposure to equities. The Irish Stock Market made modest gains yesterday but so far in 2008 it has dropped almost 8%. On Tuesday, the Irish market saw €3.2 billion of its value disappear. The Irish market is now down 31% in the past 12 months.
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EXAMINER APPOINTED TO MOBILE PHONE DATA FIRM - The High Court has appointed an examiner to a company involved in providing mobile phone data services around the world, says the Irish Times. MobileAware Ltd, formerly of Citywest Business Campus and now based in the Digital Hub in Dublin, sought the protection of the court last month after it ran into financial difficulties. An interim examiner was appointed and that court protection was extended yesterday when Mr Justice Frank Clarke confirmed Tom Kavanagh as examiner. In its petition to the High Court seeking to have an examiner appointed rather than see the business wound up, the company said there was a reasonable prospect of survival. Creditors include the Revenue Commissioners. The company, which has been in existence since 1999, sells software products for European mobile phone operators to provide WAP (wireless application protocol) services to their customers. In its early years, it won accounts with Irish, Spanish and Portuguese mobile providers and its technology is used by more than 80 other customers around the world, including AT&T, Boeing, Hertz, Coca-Cola and the Pepsi Bottling Group.
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UBS REVIEWS SECRECY FOR US CLIENTS - UBS, one of the biggest casualties of the US subprime crisis, faces an additional blow to its profitability after a decision to wind down its traditional Switzerland-based private banking business for rich US clients, says the Financial Times. The move by the world's biggest wealth manager follows a reassessment of the risks and rewards from an activity that has drawn increasing attention from US regulators concerned about marketing efforts in the US by offshore bankers. Profitability for the US business is not disclosed. However, private banking is one of UBS's most lucrative activities and the bank enjoys among the highest margins of top international wealth managers. In 2006, private banking accounted for SFr5.8bn ($5.3bn) of the group's total pre-tax profit of SFr14.4bn. UBS's decision, announced internally in late November but only confirmed publicly on Wednesday, follows the earlier termination of business with Iran. The moves are unconnected but reflect rising reputational concerns at a group that employs about a quarter of its staff in the US.
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FEARS RBS COULD FOLLOW RIVAL US BANKS - Royal Bank of Scotland shares remained under £4 for the second day running yesterday on fears that it might follow US rivals and raise fresh equity to shore up its capital base, writes the London Independent. Concern mounted after Citigroup and Merrill Lynch, two of Wall Street's biggest banks, announced a combined $21 billion (£10.7bn) of capital injections on Tuesday to boost their battered balance sheets in the wake of the credit crunch. Investors included Singapore and Kuwait state investment funds and the Korean government. The banks' raising of capital came soon after earlier injections from investors including the Abu Dhabi government and Singapore's Temasek. Citi and Merrill's capital injections came on the same day as a note from UBS analysts that said RBS would suffer most from "de-gearing" of its capital base. The analysts also said that UK banks might announce capital raisings but that it was not inevitable. The news pushed RBS's shares below £4 for the first time since August 2000 and they remained there yesterday, closing little changed at 391.25p.
