IRELAND SHOWS STRUGGLING EUROPE THE WAY AHEAD - The world has watched transfixed as Scotland wrestled with its destiny. But now that its future is settled, it is Scotland’s Celtic neighbour Ireland that should be drawing attention, writes the Financial Times in an editorial piece today. It was revealed last week that Ireland enjoyed astonishing growth in the second quarter. At an annualised rate of 7.7%, this is a pace unseen since the heady days of the early 2000s. After becoming the first country to exit its EU bailout, it is now forecast to continue growing strongly. As countries such as France and Italy stagnate, while bickering about long overdue reforms, they should take note of exactly how the Irish have done this. In some ways Ireland has been fortunate. Its two biggest trading partners, the US and Britain, are both growing strongly. Its low bond yields owe more to the decisive actions of Mario Draghi, European Central Bank president, than to any decisions made in Dublin. But this is not just the luck of the Irish. For seven years its government and long-suffering people have taken the toughest of choices. The costs of a bloated public sector were reduced with swingeing wage cuts and slashing the payroll. Private sector wages have fallen by more than 2% annually in the past four years, restoring competitiveness to industry. Above all, the government recognised the serious risk played by its shattered banking system and took steps to rebuild it. Through its “bad bank”, the National Asset Management Agency, it made banks come clean about their losses. By forcibly swapping toxic assets for safer government debt, it cleared the way for lending to start again.
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IRISH INVESTORS CLEAN UP ON ALIBABA PUBLIC LISTING - A group of Irish investors are sitting on profits worth millions of euro after backing the Chinese technology giant Alibaba, says the Irish Independent. Davy Private Client are understood to have put together a group of investors who invested about €20m in funds managed by private equity firm Silver Lake Partners. Silver Lake was one of the biggest supporters of Alibaba, pumping about $825m into it in a number of tranches over several years. The company has made about $4.6bn profit after Alibaba listed on the New York Stock Exchange last Friday. Shares in the company jumped by more than a third within minutes of going public. The shares closed at $93.89 after opening at $68. The Irish investors that were assembled by Davy are thought to have numbered in the "tens rather than hundreds". The consortium put in about €20m into the Silver Lake fund, which also invested in another Chinese retailer - JD.com. JD.com went public in May and the move has been a success so far.
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AUGHINISH ALUMINA PLANT RECORDS €12m PRETAX PROFIT - The Aughinish Alumina plant in Co Limerick recorded a pretax profit of $15.6 million (€12.2 million) in 2013 following the closure of its defined benefit pension scheme, according to accounts filed at the Companies Office. The profits for the Shannon estuary-based alumina refinery, owned by Russian aluminium giant Rusal, mark a turnaround on the operations performance in 2012, when it dipped into the red and had a $10.4 million (€8.1 million) pretax loss, says the Irish Times. The main activity of the company is the production and sale of alumina, which is extracted at the plant from bauxite, and then exported outside the EU for further processing to aluminium metal. The accounts for Limerick Alumina Refining Ltd and its subsidiaries show turnover increased in 2013 to $608 million, up from $586 million the previous year. The cost of sales also rose, from $589 million to almost $613 million, meaning there was a gross loss of $5 million. However, it was brought back into the black by a curtailment gain of $25.4 million triggered by the closure of its defined benefit pension scheme. The company employed some 450 people during 2013, the same number as in the previous year. It paid tax of $3.2 million on its activities.
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BANK OF IRELAND TO BEEF UP AGRI TEAM - Bank of Ireland is beefing up its agri team with the addition of another 15 managers before the end of this year in an effort to gain market share in what is a growing sector. The bank recently launched a €1 billion fund for lending to the agri sector and in particular to support farming customers for a range of farm investments and improvements to include the purchase of land, livestock and farm machinery, says the Irish Examiner. “Our lending figures to the agri sector in the first half of this year attest to the continuing increase in demand for credit from this very important sector of the economy. “Our loan approvals for the first half of 2014 have increased by 16% when compared with the same period last year and our approval rate is almost at 90%. In addition, we are currently approving funding for the purchase of over 400 acres of land per week,” said Sean Farrell, head of agriculture at Bank of Ireland Business Banking. As it stands Bank of Ireland provides more than 50% of all new and increased agri lending, with land acquisition, farm buildings and increased stocking requirements the main drivers of growth.
