MBNA TO CUT 66 JOBS AT LEITRIM CENTRE - The Bank of America owned credit card company, MBNA, is to cut 66 jobs at its operations centre in Carrick-on-Shannon in Co Leitrim. The company said that the compulsory redundancies were being introduced as part of a restructuring of the business in response to the economic downturn. Bank of America employs 1,700 here, 1,000 of whom are at MBNA in Carrick on Shannon.
Larry Broderick, the general secretary of finance union IBOA, says that today marks another very sad day for those working in the country's financial sector. He says that about 6,000 jobs have been lost in the sector over the last 18 months or so and predicts that another 4,000 could be lost in the coming months. He said the IBOA is engaging with both foreign and Irish owned banks about their restructuring plans, and a clearer picture of the future of employment in the sector is now emerging.
Admitting that 'huge rumours' are circulating about AIB, he says that job losses at the bank are inevitable and urges the bank's management not to sell its First Trust and UK operations. Mr Broderick says that the recent job losses in the financial sector are an indication of how badly mismanaged the banks were and he says it is now IBOA members who are suffering. He says a jobs strategy for the sector is key at this point.
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DUBLIN BECOMING MORE COMPETITIVE ON THE OFFICE FRONT - A report from property agents CB Richard Ellis says that because of the Irish corporation tax rate Dublin has won more foreign direct investment and office letting than competing cities over the last ten years. The 12.5% rate balanced out the anti-competitive costs of doing business here. It says that at a certain point in the last ten years office rents were 65% higher in Dublin than other cities reviewed, like Amsterdam and Manchester. But Dublin's fall in the past two years has been more significant than in any of the other cities surveyed.
Marie Hunt from CBRE says that Ireland is now in a much stronger competitive position as wages, rents and house prices have fallen. She always points out that there are up and down rent reviews. While it was not a conscious decision by the industry to cut costs - the recession forced our hands - Ms Hunt says that now we must focus on keeping those costs down. She also points out the big differences in rents in Dublin and Belfast with rents in Dublin 60% above the northern counterparts. She says this poses a threat to the Dublin office market, particularly if corporation tax in the North is reduced.
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MORNING BRIEFS - Spanish bank Santander has gone back to talks in recent weeks with M&T Bank over a merger of its US operations with the regional Buffalo-based bank. The talks about combining Santander's US unit, known as Sovereign, with M&T collapsed in May over the issue of which bank would control the enlarged business. The deal originally being discussed would have seen M&T acquire Sovereign in a stock-based transaction, creating a business with some $150 billion in assets and more than 1,500 branches in the north-east of the US. Santander would then have increased its stake in the new bank by buying the 22.5% stake in M&T owned by AIB, which has to sell its overseas assets to raise cash.
*** Hundreds of Irish investors who sold holiday properties in Spain during the boom may be due tax rebates of up to €20,000 after being overcharged by Spanish tax authorities on the sale of their properties. Last year the European Court of Justice said the higher rate of tax being applied to investors not resident in Spain went against European treaty rules, and the Spanish government was forced to set up a fund to compensate those who had paid the higher tax. Successful claimants will also get 6% annual interest, and the deadline to reclaim the payments is October 31.
*** Later today the Government is to auction bonds to investors as part of its borrowing on the international markets. The success of the auction, and the interest rate at which the bonds are sold, will be key indicators of how international investors see the country's prospects for recovery. The market for the bonds stabilised yesterday, but yields remained high.
*** On the currency markets this morning, the euro is trading at $1.2849 cents and 81.99 pence sterling.
