BANK OF IRELAND'S UK SUBSIDIARY PAYS £220M DIVIDEND TO IRISH PARENT - Bank of Ireland's subsidiary in the UK paid its first equity dividend last year with £220 million (€253 million) handed over to its Irish parent company in September 2016.
This is revealed in accounts just filed for Bank of Ireland (UK) plc, which show that the company's after-tax profit was reduced by 13% to £164 million in the year to the end of December. In his statement in the company's annual report, Robert Sharpe, chairman of Bank of Ireland’s UK subsidiary, described the dividend payment as a "very important milestone" for the subsidiary, says the Irish Times. The accounts also state that the company "expected to pay dividends in coming years". In addition to the dividend, the UK business also paid £24 million to its Dublin-based parent in equity coupons relating to additional tier 1 capital instruments. Bank of Ireland’s UK accounts also show a strong recovery in profitability in Northern Ireland. The lender made a profit of £50 million in the North in 2016 compared with £7 million in the previous year. This was attributed to "improved funding costs, efficient cost control and ongoing management of impairment charges on its commercial loan portfolio".
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BANKS ORDERED TO BRING IN 'AMBITIOUS' BAD LOANS PLAN - The European Central Bank has said it expects banks with high levels of unpaid loans to submit "ambitious and realistic" plans to bring them down, as it published guidelines on non-performing loans (NPLs).
The project to address high levels of NPLs is being spearheaded by the deputy governor of the Irish Central Bank, Sharon Donnery. The guidelines published yesterday stopped short of forcing banks to meet specific targets to reduce their stocks of bad loans, or hard timetables for action. They will mean banks have to provide more detail to regulators about their stocks of loans, says the Irish Independent. "Plans should be ambitious and realistic," the eurozone's top bank supervisor said on its website after seeking industry feedback on the guidelines. "Regarding enhanced disclosures on NPLs, to ensure consistency and comparability the guidance should be implemented from the 2018 reference dates onwards." European Union banks are sitting on bad loans totalling €1 trillion. Irish banks continue to have some of the highest levels of problem debts in the euro area, despite more than €124 billion of debts being taken into Nama or disposed of by lenders since the crash.
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CRH SET FOR €1 BILLION SPEND THIS YEAR - Building materials giant CRH is expected to spend over €1 billion this year on bolt-on acquisitions, with outlay in the first quarter alone already topping €600m.
Earlier this month, on the back of a strong set of annual results, CRH chief executive Albert Manifold said the group could comfortably spend between €2 billion and €3 billion on acquisitions over the next 18 months, but stressed this range related to spending capacity rather than fixed outlay targets. However, the same results presentation noted that CRH has already spent around €500m on eight acquisitions and investments since the turn of the year - more than double the amount spent in the whole of 2016, says the Irish Examiner. It also raised around €400m via disposals last year. That €500m spend has already been added to, with US-based composite building materials manufacturer Advanced Environmental Recycling Technologies (AERT) reporting that it has signed an agreement to be acquired by CRH’s US subsidiary, Oldcastle Architectural, for a total consideration of $117m (€109m).
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MARS BRACES FOR MALT BALL BATTLE WITH HERSHEY - Mars is introducing Maltesers into the US, marking its first chocolate brand launch in its home market in 20 years, as the confectionery-to-pet food conglomerate battles to recover some of the market share it has lost to rival Hershey in America.
While Mars has introduced a wide range of variations of existing products over the years, such as M&M’s pretzels, this is the first time it has started selling a brand that is completely new to the US since it brought Twix to the market two decades ago. Mars has been unable to introduce the brand in the US until recently, having emerged from a legal tussle with Hershey over the product name, says the Financial Times. Hershey owned the rights to the name Malteser, and in 2014 Mars accused Hershey of "sporadically" trying to pass off its products as Mars' Maltesers. The life-long rivals settled out of court in 2015, clearing the path for Mars to sell Maltesers in the US. Hershey said only that it and Mars had settled the case amicably, declining to comment further. Tracey Massey, head of US chocolate at Mars, said in an interview that introducing completely new chocolate brands was a difficult and long-term endeavour, as consumers tend to stick to about three choices, often ones associated with childhood memories.
