PERMANENT TSB'S OFFER TO TRACKER CUSTOMERS - Permanent TSB customers who make lump-sum payments to their mortgage accounts of €5,000 are to receive bonus payments of 10% from the bank on their payments. The offer is for all trackers mortgages - residential, investment and commercial - between now and the middle of June. And for now the bank has set a limit of €500m on the scheme.
Permanent TSB's chief executive David Guinane says the bank has 70,000 tracker customers in total - 50,000 residential mortgages and 20,000 buy-to-let mortgages. The tracker mortgages were sold by the bank between 2004 and 2008 - at the height of the property boom. He says today's initiative will give people with spare cash a chance to pay off their mortgage faster and at a lower cost. Mr Guinane says that unemployment has a big effect on the level of arrears and adds that people are not there deliberately.
The Permanent TSB boss says that tracker mortgages are a huge drain on the bank's profit and loss account. This initiative will alleviate pain for both the bank and its customers, he states.
Mr Guinane says that Permanent TSB will not offer a blanket type debt forgiveness scheme, but adds that such schemes have been used very sparingly by all the banks in the past. He also says that the bank will not offer a negative equity product as it would prove too complex, but says that customers who find themselves in negative equity but who are otherwise financially fine and who need to move house will be worked with.
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ANOTHER LOWER GROWTH FORECAST DUE TO WEAK DOMESTIC DEMAND - IBEC has cut its growth forecasts for this year. It says consumers are not spending money because of inflation, higher mortgage interest rates and fears about job security. IBEC's economist Fergal O'Brien says that consumers have had a tough start to the year, with the tax increases, sharp rise in commodity prices and the recent ECB rate hike. But the group is still seeing growth of 1.3% this year, which is one of the most optimistic forecasts around. The economist says the economy is a two-speed one, with exports continuing to perform strongly. As well as strong exports of pharmaceuticals, medical devices and good and drink exports, service exports are now almost as important as the things we make here, he says.
Mr O'Brien says that the Irish economic recovery is still very dependent on the global recovery, where significant risk remain including the future fallout of the huge earthquake in Japan last month. He says that food commodity prices will continue high, while oil prices still depend on stability in the Middle East.
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MORNING BRIEFS - Kenmare Resources made a loss for the year of $16m, but says the outlook for 2011 is very positive.
*** On the currency markets the euro is trading at $1.4372 cents and 88 pence sterling.
