SALE OF HOME LOANS DOMINATED IRISH NPLs IN 2019 - Irish banks sold €5.8 billion of bad residential mortgages last year, significantly outstripping sales of other non-performing loans (NPLs) for a second year, including those of commercial property and developer lending.
Data from information service Debtwire shows Ireland has slipped down a European ranking of the most-active markets for sales of bad loans, with Italy and Spain now the biggest and second biggest sources of bad loans. It reflects the fact that the bulk of bad, boom era, land and development loans at Irish banks have long been sold off, writs the Irish Independent. Irish banks sold €2.6 billion of non-performing commercial real estate loans last year. The Debtwire research shows a growing so-called secondary market, where bad loan portfolios previously sold by banks - usually to so-called vulture funds - are changing hands for a second time either in a fresh sale or securitisation. The largest European transaction of the year was a secondary securitisation. Hoist Finance closed the first-ever Italian investment grade-rated securitisation backed by a portfolio comprising only unsecured non performing loans, a €5 billion portfolio it had previously bought from Italian lenders.
NUMBER OF CREDIT UNIONS REDUCED BY NEARLY 50% SINCE CRASH - The number of credit unions operating in the Republic has fallen by nearly 50% since the crash, according to an external review of the Central Bank of Ireland's regulation of the sector, which highlighted the need for greater financial transparency.
The peer review, compiled by the International Credit Union Regulators’ Network (ICURN), noted that the number of registered unions now stands at 248 compared to 428 at the end of 2006 on foot of a massive consolidation process, which has seen dozens of smaller unions merged with larger ones while some others have gone out of business. The report was broadly positive about the Central Bank's oversight of credit unions here but highlighted several areas where improvements could be made, says the Irish Times. It said the Central Bank's semi-annual financial conditions reports could be beefed up "with peer group data on net financial margins, yields on savings, fee income, investments and loans, breakdowns of operating expenses". The review also said the Central Bank needed to do more to support the risk management culture within credit unions. "Financial institutions, of all stripes, can be lulled into believing they are effectively managing risk and complying with regulatory requirements because they have a standard set of policies (credit, liquidity investment, IT) in place," it said.
DUBLIN CITY COUNCIL PLANS BID TO CHARGE TOURISTS NEW VISITOR LEVY - Dublin City Council is set to launch a fresh bid to charge a hotel bed tax or visitor levy on tourists to the capital.
The council intends to begin a consultation with stakeholders including Fáilte Ireland and accommodation providers about the possibility of introducing some form of visitor levy to raise funds for the city’s authorities. Any new tax on tourists would need legislation to be passed by the Oireachtas. The introduction of a tourist tax or visitor levy is included in the work programme of the council’s finance strategic policy committee, says the Irish Examiner. It said its previous requests to the Government to bring in a form of tourist tax had proven unsuccessful. Its head of finance, Kathy Quinn, pointed out that tourism makes an important contribution to Dublin's economy with almost six million overseas visitors spending €2 billion in 2017. In addition around 1.8 million domestic visitors from the Republic and Northern Ireland contributed another €434m to businesses in the city. The council argues that further growth in tourism to Dublin will require additional resources to support sustainable future investment as well as to manage the impact of Dublin’s success as a tourism destination on the city and its residents. "Tourism allows for the enjoyment of local amenities by visitors who do not contribute to the costs of services for those amenities," said Ms Quinn.
BONUS BLOW FOR GREGGS STAFF PROMPTS CALL FOR BENEFIT AND TAX RETHINK - The UK government has been urged to rethink its tax and benefit rules for low-paid workers after it emerged that some staff at the bakery chain Greggs could get to keep just a quarter of their £300 annual bonus as a result of universal credit deductions.
Greggs announced last week that its 25,000 workers would receive a windfall of up to £300 under a £7m reward scheme linked in part to the success of the company’s vegan sausage rolls. However, benefits experts have pointed out that some staff who are on universal credit will keep as little as £75 after tax and national insurance (NI) are paid and bonus earnings clawed back by the government at a rate of 63p in the pound, says the Guardian. Benefits consultant Gareth Morgan said the clawing back of the bonuses through universal credit meant that the government might ultimately be one of the biggest beneficiaries of the Greggs reward scheme. Morgan calculated that under current tax and benefit rules, a worker earning less than the tax and NI thresholds of £8,632 a year would typically be left with £111 of the £300 bonus. One earning more than that but less than the upper threshold of £12,500 a year would get just £97.68 while a worker on more than £12,500 a year would end up with £75.48. Universal credit originally aimed to incentivise claimants to earn more by introducing a work allowance allowing them to keep hold of more of their benefits as their income rose. However, this was cut in 2015, and only partly restored. Claimants’ earnings over and above this allowance are in effect reclaimed at a 63% taper rate.