The State reached a break-even point on its €4.7bn bailout of Bank of Ireland for the first time yesterday as the bank's shares hit 23c, reports The Irish Independent. With the bank likely to seek new investment in a rights issue before the end of the year in order to buy out the State's remaining preference shares, the Exchequer is on course to at least get back all of the money it put into Bank of Ireland during the crisis. This depends on a number of factors, including whether NAMA manages to get back what it paid for the Bank of Ireland loans it purchased. The State's position is in stark contrast to the group of billionaire investors, including Wilbur Ross, who paid €1.1bn for some of the State's interest at just 8c to 10c per share in 2011. Mr Ross, who put in €300m at the time, has seen his stake rise in value by €366m to €766m. Taxpayers invested a total of €4.7bn in Bank of Ireland during the crisis and have so far got back €2bn in cash, according to the National Pension Reserve Fund, which manages the State bank investments.
AIB is facing possible industrial action following the collapse of talks to resolve a row over a bonus payment at its EBS subsidiary, reports The Irish Times. Members of the Unite trade union at EBS, which is part of the AIB group following the restructuring of the Irish banking sector, are to hold a general meeting tomorrow to decide on their next steps following the breakdown of talks at the Labour Relations Commission. Unite sources warned that if the meeting backed industrial action, any pickets may not be confined to EBS outlets and could be placed on selected AIB premises as their members are now all part of the same institution. It is not clear what action AIB workers, who are mostly members of the Irish Bank Officials Association, would take in the event of EBS staff placing pickets on any of their premises.
Poor loan documentation will undermine attempts by the IBRC special liquidator to sell loan books relating to the former Anglo Irish Private Bank, according to The Irish Examiner. During the boom years, Anglo Private was very active in putting together highly leveraged property and other types of investment funds to high net worth individuals. Anglo Irish Bank also provided the loans to these high net worth individuals to invest in these funds. Most of these funds are under water, which means there is now very poor collateral against the loans. But a source with direct knowledge of the situation said that there was inadequate due diligence in the personal loans drawn up by the former Anglo Irish Bank. There is very poor quality loan documentation and in many cases, there had been no contact between IBRC and high net worth clients for a number of years prior to the bank’s liquidation last February. The sales process of the entire €22.4bn IBRC loan book is scheduled to commence next week. Loans that were given to high net worth clients of Anglo typically ranged from €5m to €20m and it is believed that the combined total is just under €500m.
Hoteliers in UK regions are emerging from three years of economic depression and long-term revenue decline into a better climate of increased occupancy and stable room rates, reports The Financial Times. Competition in the provinces is also growing, with the hotel supply increasing as budget chains chase the cost-conscious business traveller and as four-star operators push their brands in the regions. A PwC report said occupancy in the regions is forecast to hit 71% – levels last seen in 2007 and 2008 – and to stay there next year. Average daily rates this year will be nearly £60, the best showing since 2009. Revenue per available room, the main benchmark for the hotel industry, will grow 1.8% next year to £43.44, well down in real terms compared with the pre-crash era, but “at last” showing signs of stability, said the consultants.