BANK OF SCOTLAND (IRELAND'S) CUSTOMERS UNDER PRESSURE TO FIND NEW FACILITIES - Thousands of businesses will begin assessing the impact of Bank of Scotland (Ireland's) decision to pull out of Ireland. It will hand back its banking licence and close the business to deposits, current accounts and new lending by December 31.
John Finn, from Treasury Solutions - which arranges and organises finance for businesses - says that businesses have been given three months by BoSI to find replacement banking facilities, including an overdraft. He says in the current climate this is very short notice and places many businesses in a very difficult position. He says the bank's decision also means the onus falls on the Government to help start to get credit flowing again. On interest rates, Mr Finn says that while the ECB's key lending rate is expected to stay at 1% until the third quarter of next year, short term rates have already started to rise. This hits the likes of overdraft costs.
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KEY DAY FOR AIB AND EBS - Today sees a deadline in the bidding process at two of the country's banks. AIB is selling its 70% stake in Polish bank, Zachodni WBK to help meet capital requirements set by the financial regulator. Bids are expected from Europe's two strongest banks, BNP Paribas and Banco Santander who are competing with state-controlled lender PKO. The bank must raise €7.4 billion by the end of the year.
Bloxham's Kevin McConnell says the Polish sale is a significant part of AIB's capital raising plans. He says the sale of the Polish bank should result in a net gain of about €2 billion. As well as the sale of Bank Zachodni, AIB is also looking to offload its M&T stake in the US and its UK operations. Mr McConnell says the bank is likely to move to raising money on the markets in September.
Meanwhile, the EBS Building Society is set to receive a second round of bids from private equity groups and Irish Life and Permanent. A source has confirmed that three private equity groups - US firm JC Flowers, Britain's Doughty Hanson and Dublin based Cardinal Asset Management - are expected to bid for the state run building society, as well as Irish life and Permanent. EBS needs to find €775m by the end of the year to shore up its capital base.
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MORNING BRIEFS - Mazda is recalling approximately 800 cars in Ireland because of potential problems that could affect the power steering. The recall involves the Mazda 3 and 5 models, which were built between April 2007 and November 2008. An estimated half a million cars are involved worldwide.
*** Technology firm Dell beat Wall Street sales and profit forecasts, and predicted a 'pick-up' in demand from corporate customers. The world's number three computer maker had revenues of $15.5 billion in the second quarter. Dell's figures are closely watched, as spending on technology is a guide to the health of corporate America.
*** On the currency markets, the euro is trading at 82 pence sterling and at $1.28.
