ULSTER BANK COULD BE PART OF ‘THIRD FORCE’ – The Irish Times reports that the Government and Royal Bank of Scotland have held talks about Ulster Bank having a role in a third banking force here.
Talks are believed to be at an early stage, but could involve a tie-up with Permanent TSB, which is 99.2% State owned, along with involvement from private equity firms.
RBS which owns Ulster Bank has been reviewing its future for the past five months. Last week, the British bank said it would “continue to explore further opportunities to transform” Ulster Bank business in the Republic.
It is understood that RBS has set up a team internally to look at its strategic options for Ulster Bank, which has received a £15 billion bailout from its parent company since 2008 and made an operating loss of £1.5 billion last year. It is led by a senior member of its restructuring team.
The British bank is believed to have held talks with a number of private equity firms about providing financial backing for a new venture here.
RBS chief executive Ross McEwan met Minister for Finance Michael Noonan on February 10th during a brief visit to Dublin. It is believed that they discussed the Government’s idea for a third banking force.
The Government is eager to ensure that Ulster Bank does not join the exodus of financial institutions that have left Ireland over the past five years, with Danske Bank and ACC currently in wind-down mode.
NAMA CHIEF DEFENDS BATTERSEA SALE - The chairman of NAMA has defended the agency's sale of the Battersea power station site in London against claims it should have held out for a higher price, reports The Irish Independent.
It follows claims that taxpayers here may have lost out on hundreds of millions of euro because of the timing of a 2012 sale by NAMA of loans secured on the site, which has planning permission for London's biggest property development.
The disposal was described by Kevin McCauley, senior director of research and consulting at CBRE in London, as "the deal of the century", for Malaysian buyer SP Setia.
"We didn't sell early, we sold at the right time," Frank Daly, chairman of NAMA, said.
"We sold that loan for £500m (€600m). So we got back the full value of the loan."
The idea that NAMA should have held on and developed Battersea and other London sites itself – and therefore have recouped billions of euro down the road for the taxpayer – misses the reality, Mr Daly claimed.
To develop the Battersea site it would have had to pay £200m to buy out Lloyds Banking Group's share of loans secured on the property and then invested as much as €6bn in construction, Mr Daly said.
ECB STILL EXPECTS SALE OF COILLTE - The European Central Bank is still under the impression that the Irish forestry body, Coillte, will be privatised as part of the troika programme for government, reports The Irish Examiner.
In a response to a query in relation to the proposed sale of Coillte, the director of the European Central Bank secretariat, Pierre Van Der Hagen said that releasing any data could harm a future sale of the state company.
Mr Van Der Hagen said that the Coillte privatisation was a crucial part of the EU/IMF bailout programme agreed to by Ireland.
“The disclosure of commercially sensitive data at this early stage of the overall restructuring of Coillte could unduly affect the valuation of Coillte assets and thus run counter to the interests of the Republic of Ireland in implementing its economic policy.
“Given that this privatisation forms an integral part of the structural measures to which the Government of Ireland committed as part of the EU/IMF programme, it is in the public interest to protect such commercially sensitive data in order to ensure the best possible financial outcome of the privatisation process for the economic benefit of the Irish State budget,” he said.
The ECB statement seems to be at odds with the Government’s plans for Coillte.
The Government bowed to public pressure and backed down from selling the harvesting rights to the million acres of trees that the semi-state company has under its control.
RBS TO PARE BACK US OPERATIONS – The Financial Times reports that Royal Bank of Scotland is set to become the latest European bank to sharply pare back its US business in response to new rules from the Federal Reserve.
The British lender is planning to more than halve the assets in its broker-dealer operation in New York in order to pull assets below the $50bn threshold at which the toughest part of the new regime bites.
The move comes as Deutsche Bank draws up plans to slash its US assets by up to a quarter, largely through reassigning operations to Europe or Asia.
The Fed confirmed last month that overseas lenders operating in the US would have to ringfence capital in the country to safeguard against future crises.
The foreign banking organisation regime, which comes into force in the second half of the decade, will require banks with more than $50bn of assets to set up a holding company and comply with tough capital and leverage requirements.