FORMER ANGLO CHIEF JOINS AFRICAN MONEY SERVICE - Mike Aynsley, the former chief executive of Anglo Irish Bank, has joined the board of African money service business (MSB) Dahabshill Transfer Services. He has also agreed to act as its interim managing director in the UK, where it is the biggest player in the emigrant remittance market to Somalia, estimated at $500 million a year. Dahabshill employs 5,000 people and operates in 286 locations in Somalia, as well as having branches in 150 countries and 180 agents in the UK alone, writes the Irish Times. The family-owned business is the biggest private sector employer in Somalia and is led by Abdirashid Duale, a British-Somali entrepreneur, whose father founded the business in 1970. Mr Aynsley said his new job was to “ensure the company remains aligned to the evolving regulatory and business environment in which it operates”. “Somalia has no formal financial infrastructure and as a result the MSB industry effectively acts as the banking system,” he said. “MSBs are the only safe and transparent way to send money into Somalia. “As such, millions of people - 40% of the population - rely on remittances to support their livelihoods, and remittance account for around 50% of Somalia’s gross national income.
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FAMILIES FREED FROM HUGE DEBTS IN JUST THREE MONTHS - Families with massive debts are benefiting from a new trend for fast-exit insolvency deals. These are arrangements where banks and other lenders sign up to release overstretched borrowers from an insolvency deal in just three months. This is instead of five years as originally envisaged for the arrangements administered by the Insolvency Service of Ireland. A small number of these fast-track insolvency deals have already been put in place, completed and approved by the courts, the Irish Independent has learned. But finance experts said they were ready to roll out hundreds of them, as they were favoured by banks because they are cheaper than a five to six-year personal insolvency deal. Waterford-based personal insolvency practitioner (PIP) Mitchell O'Brien said he had already helped three families exit personal insolvency arrangements (PIAs) in just 90 days. PIAs were designed to last up to five years, but can be extended to last six years. A PIA is designed to deal with mortgage and other debts, such as car loans and credit union borrowings. Mr O'Brien said there was nothing in the insolvency legislation on the minimum amount of time a PIA could take. In the three cases he has had court approval for, amounts in excess of €100,000 were written off the mortgage debts, while most of the other borrowings were wiped out.
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'IRISH BUDGET DEFICIT MAY BE ELIMINATED IN NEXT THREE YEARS' - Ireland’s budget deficit should be eliminated in the next three years, with a surplus of nearly 2% of GDP being generated by 2019, a British economic think-tank has claimed. The London-based Centre for Economics and Business Research has suggested that economic growth will significantly lag consensus opinion this year, but be better than expected next year, writes the Irish Examiner. Its outlook for Ireland’s continued recovery, however, is based on the Government sticking to its austerity plan and not deviating from its planned €2 billion adjustment pencilled in for Budget 2015. While most domestic commentators are expecting Irish GDP to grow by 2% to 2.5% this year, and by a little over 3% next year, the Department of Finance is anticipating the economy will grow by 2.1% this year, and by 2.7% in 2015. The centre thinks a slow pick-up in consumer spending and weak exports will keep GDP growth constrained to just 1.3% this year. However, it feels that Ireland’s prospects are very healthy, overall, with it forecasting a budget surplus - of 0.8% of GDP - by 2018. For 2015, the centre is forecasting Irish GDP growth of 3.4%, the most confident outlook offered to date.
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RBS CLAMPS DOWN ON LARGE MORTGAGES - Royal Bank of Scotland has become the second UK lender to cap large mortgage loans, amid rising concerns that the London property market is overheating. RBS, which is 81% owned by the government, is restricting customers to a maximum of four times their income on loans of £500,000 or more - echoing Lloyds’ move last month, says the Financial Times. It is also capping loan terms at a maximum of 30 years on large sums to prevent borrowers taking on more debt by spreading repayments over longer periods. The clampdown by the two state-backed lenders comes as the Bank of England is considering tightening controls on risky mortgage lending. Brussels also called this week for the government to tackle the rapid rise in property prices by reining in its Help to Buy scheme, amid fears the booming housing market is posing a threat to the UK’s economic stability. Nationwide Building Society on Tuesday reported that its raw measure of the average house price has hit a record level of £186,512, exceeding the previous peak in 2007 for the first time. The Nationwide figures indicated that the property market was still recovering strongly, despite signs that mortgage lending activity has cooled. House prices grew at an annual rate of 11.1% in May, it said, up from 10.9% a month earlier, with London leading the way. Prices in the UK capital rose at an annual pace of 18% in the first quarter of the year, almost twice as fast as the UK as a whole.
