NEW REPORT FROM S&P SAYS BANKS WILL NEED MORE CAPITAL - In its latest report Goodbody Stockbrokers has upgraded its forecast for economic growth this year from 1.3% growth in annual output, or GDP, to 1.6% driven by strong export performance and better signs from the domestic economy including a recent pick-up in retail sales. But a report from ratings agency Standard and Poor's carries a less optimistic prediction at least as far as the Irish banks are concerned. S&P states that the Irish banking system will need more capital. In a paper examining the ties between the state and the banks, S&P says it does not expect the Government will be able to quickly reduce support for the banks.

Nigel Greenwood, primary credit analyst with S&P, says the Irish banks are weak in terms of capitalisation on a global basis and there is no near term solution for this. Mr Greenwood predicts that the banks will report more losses this year and next year, but stresses that the recapitalisation problem will have to be solved at some stage. The analyst says it is estimated that about a quarter of mortgages are in difficulty - which he describes as an exceptionally high number. He says the banks will have to endure even more losses on both their mortgage and SME loan portfolios. However the analyst does see some positive developments in recent months, including Bank of Ireland's €1 billion sale of contingent capital notes while they have also been able to reduce deposit pricing. Results of stress tests - due later this year - will give everyone a clearer picture of where the Irish banks stand, he added.


MORNING BRIEFS - Associated British Foods has said sales for the four month period up to January 5 at its subsidiary Primark were above expectations. Primark sales were 25% ahead of the same period last year - it trades as Penney's here. Meanwhile, electrical goods retailer Dixons has reported 3% growth over the past three months at shops which have been open for at least a year.

*** Customers shopping and paying for goods and services online using mobile smartphones gave Ebay and its payments subsidiary Paypal a big Christmas bonus, according to results published by the company overnight. Ebay reported 18% growth in revenue and profit climbed from $789m to $927m over the final quarter of last year. Mobile shopping and mobile payments are the big growth story here for the company which is one of the biggest employers among foreign direct investors in Ireland. During 2012 the number of transactions eBay completed over mobile devices doubled to $13 billion and the volume of payments it handled trebled to $14 billion compared to 2011 levels. The company says it signed up 4.3 million new users through its mobile apps last year.

*** Oprah Winfrey's US cable channel OWN is expecting its biggest ever audience when at 2am Friday morning Irish time it airs the first half of her interview with Lance Armstrong. The channel's current record is 3.5 million prime time viewers for Oprah's interview with Whitney Houston's daughter after the singer's sudden death. The network averages just 330,000 viewers during prime time according to the Nielsen ratings.That is 30% higher than OWN was pulling in back in 2011 but it is still a good way behind rival niche channels. NBC's Oxygen network, for example, pulls in 377,000. OWN uses Oprah's own show to attract big interviewees and hope the spike in audience figures for those shows helps recruit new viewers.