ULSTER BANK TO SPEED UP SALE OF ITS REMAINING TOXIC LOANS - Ulster Bank is believed to be speeding up the sale of the lender's remaining Irish loans as the UK parent decides to cut its losses and wind up its toxic loans unit early.
Royal Bank of Scotland is said to be planning to off-load most of the toxic assets in its bad bank by the end of this year - 12 months earlier than planned, says the Irish Independent. Ulster Bank has already sold off most of its bad property- related loans made during the Celtic Tiger era, but at least some of the assets yet to be sold by RBS will be tied to Ireland. A spokeswoman for Ulster Bank, however, declined to comment. Ulster took a write-down of more than 75% when it sold off its Project Aran portfolio of loans tied mostly to Irish assets just before Christmas. The bank also dispensed with a €1.2 billion portfolio known as Project Achill last year. There is still more to come, however. In its last quarterly results, RBS said that there were assets worth a nominal £2.9 billion (€3.9 billion) still on the balance sheet of RCR Ireland - the group's internal bad bank. The vast majority of those assets will be sold off at a loss. Unlike other Irish banks, Ulster is owned by the UK's RBS, so none of its loans have been transferred to Nama.
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PENSION LEVY ON PRIVATE SECTOR NOT ALWAYS ‘FAIR’ - The Pensions Ombudsman has told the Oireachtas finance committee that the Government’s imposition of a 0.6% levy on private sector pension schemes in 2011 was “legal but not necessarily fair”. Paul Kenny, who has been ombudsman since 2003, said the levy has also hit payments to pensioners as trustees sought to share the burden among scheme members, writes the Irish Times. “In paying out the levy, amounting over four years to 2.4% of the value of the assets held, trustees were faced with a permanent reduction in the assets which they had to ‘back’ the pensions already in payment,” Mr Kenny stated in a three-page letter sent to the clerk of the committee on January 22nd and seen by The Irish Times. “Most trustees felt that they had no choice but to reduce the pensions already in payment to pensioners as, otherwise, the full brunt of the levy would be borne by future pensioners, either active members or those with deferred or preserved benefits.” Mr Kenny said that, in “most cases”, the effect of the reduction in payment would “last for the lifetime of the pensioner”. This contrasts with the public sector pensions levy which, “although it is very high, is intended to be temporary”.
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PLANS TO CUT TAX MAY BOOST GROWTH, SAYS TROIKA - Government plans for tax cuts and additional expenditure could increase growth this year, the troika says in its review of the country’s economy. However the troika continues to have reservations over the Government’s refusal to put more money into bringing down the country’s budget deficit faster, says the Irish Examiner. They also warn that the Government changes to Irish Water charges means it could have problems raising funds for needed investment and increase the budget deficit by €85m this year. The report, from the visit by European Commission and ECB members of the troika to Dublin in November, is generally positive, projecting growth of around 3.6% this year and next. Tax cuts and additional expenditures - which the troika had not been very supportive of - could add up to 0.3 percentage points to GDP growth this year. But spending was higher than targeted and the supplementary budget was needed for extra spending in health, agriculture, transport, education, justice, environment, and storm damage. Compared to previous years, cuts elsewhere were not being sought to offset these increased costs. In addition, there was the deferral of water charges and the frontloading of capital injections in Irish Water while there was also a European Court of Justice pension ruling with a liability of about €100m.
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AMAZON LAUNCH LANDS IN RIVALS' MAILBOX - Amazon is launching a new corporate email and calendar service for office workers in the latest expansion of its online empire, as it challenges enterprise services offered by the likes of Google and Microsoft. The service, to be called Amazon WorkMail, is being pitched as offering stronger encryption services and putting more control in users’ hands over where their data are stored, says the Financial Times. Companies have grown more wary of the US government’s ability to monitor or subpoena data held on servers within the US following Edward Snowden’s leaks of National Security Agency documents showing its surveillance of some internet traffic and its ability to subpoena users’ data from US internet and telecoms groups. TJ Keitt, an analyst at Forrester, said some users’ security concerns about Google and Microsoft’s email and file sharing services could offer Amazon a way into the market. “Lots of questions have been raised about US companies’ relations to the NSA and the federal government and their stance towards subpoenas, and Amazon hasn’t been as battered by the documents that came from Mr Snowden as Microsoft and Google have been,” he said. The launch is the latest from one of the world’s most ambitious internet companies, which already comprises the US’ largest ebook retailer, a Golden Globes-winning film studio, and Amazon Web Services, a cloud computing business that counts the Central Intelligence Agency, Netflix and Nasa among its customers.
