The Irish Independent reports that Irish Life & Permanent (IL&P) has denied there is any potential conflict of interest in its pursuit of EBS, though one of its directors is the chair of NCB Stockbrokers, the firm advising EBS on the transaction.

Four bidders have expressed an interest in purchasing EBS, and NCB and KPMG are being retained by the building society for advice on the sale. NCB is chaired by Breffni Byrne, a non-executive director at IL&P. A spokesman for IL&P said Mr Byrne had advised the board of IL&P of his position as a non-executive chairman of NCB. Mr Byrne made it clear that as a non-executive chairman of NCB he had no role in respect of the EBS transaction, the spokesman said. IL&P is currently chaired by Gillian Bowler (pictured).

The other bidders for EBS are Doughty Hanson, owner of TV3, JC Flowers, the US private equity company and Cardinal Asset Management, controlled by Irishmen Nick Corcoran and Nigel McDermott. The NTMA is handling the sale and a preferred bidder is expected to be named shortly.

If IL&P does not emerge victorious in the bidding round, it will be the first time a new entrant has come into Irish banking in several years.

The scale of the capital the bidders are prepared to commit to EBS is one of the key considerations, but some of the bidders are also believed to want a state guarantee over any potential future liabilities.

EBS, like Irish Nationwide, is effectively controlled by the state through a special investment share and any bid needs the consent of the Finance Minister and the Regulator.

Ignore

While the Competition Authority normally has a role in bank mergers, legislation passed in the past two years allows the Finance Minister to ignore the authority if he feels it is necessary.

Mr Byrne joined IL&P in 2004. He is a non-executive director at Coillte, Tedcastle Holdings and Cpl Resources. He is a former senior partner of the audit business of Arthur Andersen in Ireland.

The Irish Independent also reports that banks and building societies are seeking more time before they have to put in place new rules for dealing with householders in arrears on their mortgages.

Financial Regulator Matthew Elderfield has suggested major changes to the way lenders deal with homeowners in arrears.

The Irish Banking Federation (IBF) has not objected to the changes in the revised code of conduct on mortgage arrears, but has questioned the deadlines set to implement the amendments.

In a submission made on the proposed changes to the code, the IBF has also sought clarification on how some of the new rules would work in practice.

The Regulator published a document proposing changes to the code and sought submission up to last Friday.

If implemented, the planned changes would make it more difficult for mortgage-holders to end up having their homes repossessed.

Moratorium

The new rules would allow those in arrears to stay in their homes longer than allowed by the current 12-month moratorium on repossessions.

Lenders would have to explore all viable options with borrowers in arrears and examine all alternative repayment measures.

Where borrowers are behaving reasonably, banks and building societies would have to wait at least a year before applying to the courts to repossess a home.

Each lender would have to set up an arrears support unit, and put in place a mortgage arrears resolution process. They would also have to have a dedicated person dealing with arrears in each branch.

The regulator had been seeking to have these changes in place by November, an IBF spokesman said.

In a submission to the regulator, the IBF has questioned the deadline for implementing the new processes.

Bankers have also sought clarification on some of the other proposals. For instance, they want to know if designated branch officers dealing with arrears could carry out other functions within the branch.

The Irish Times reports that the €25 billion or more costs of bailing out Anglo Irish Bank are “manageable” and will not bankrupt the State, Minister for Finance Brian Lenihan has contended.

Mr Lenihan accepted, however, the Government must chart a clear course for Anglo to “derisk” it for the taxpayer and to allay international concerns about the bank sinking the economy.

He said the best option for Anglo was reducing its debt and its risk over an extensive period. Mr Lenihan would not disclose if the Government, as has been reported, now favours a wind-down over a long period over the good bank/bad bank solution proposed by Anglo’s management.

Speaking before his departure for Brussels where he met EU competition commissioner Joaquín Almunia to discuss the bank’s future, Mr Lenihan also disclosed the date for this year’s budget – Tuesday, December 7th.

Mr Lenihan told RTÉ the Government had had to live with the danger posed by Anglo since September 2008 and had to “navigate some very difficult waters”.

“International conditions have become much more fragile since May of the year. There’s a general uneasiness in European markets. We have to hold our nerve,” he said. “We need to set out a clear course for the bank and how it will be derisked for the Irish State and the Irish taxpayer.”

The Minister said the alternative of letting the bank fail was “unthinkable”, and asserted there could be no default on debt. He said the economic situation in Iceland had continued to decline since it defaulted, while “we are seeing stabilisation here in Ireland”.

He also said Latin American companies that defaulted had been left in “deepfreeze” for many years.

Taoiseach Brian Cowen would also not disclose the Government’s position ahead of Mr Lenihan’s meeting with Mr Almunia.

Speaking in Tullamore, Mr Cowen would say only he sought a solution that “was in the best interests of the taxpayers” and that all options were being looked at.

Fine Gael’s deputy finance spokesman Kieran O’Donnell said the Government’s conversion to a wind-down solution was a monumental U-turn. He said Fine Gael had called for an orderly wind-down of Anglo two years ago, but the Government had been determined to keep the bank alive.

“We are now in a situation where it will cost €25 billion or upwards. People know it was wrong. The Taoiseach and Minister call it an evolution. But it is really a monumental U-turn,” said Mr O’Donnell.

Labour’s finance spokeswoman Joan Burton said Fianna Fáil had prioritised saving Anglo over creating jobs in the economy.

“If the Government knowingly guaranteed the debts of bankrupt banks, as now seems to have been the case, they will have jeopardised Ireland’s economic sovereignty to save a niche developers’ bank of little systemic importance to the economy as a whole.

“The Labour Party stood alone in the Dáil in opposing the blanket bank guarantee, and subsequent events have since vindicated this position,” she said.

The Irish Times also reports that the board of the State training authority, Fás, is expected to conclude a two-day meeting in Waterford today where it is considering the organisation’s future.

A change to the authority’s name could be among the ideas agreed at the meetings. A spokeswoman could not say yesterday if the board would issue a comprehensive statement after the meeting.

Paul O’Toole, the director general appointed in April of last year, told RTÉ that he believed that difficulties which emerged in a recent European audit of Fás expenditure would be satisfactorily resolved.

The difficulties have led to the temporary cessation of claims by the State for European Social Fund money. EU funding of €211 million was allocated to Ireland for the period 2007 to 2013.

“We believe we will be able to make claims for that €211 million,” Mr O’Toole said. “That will be our aim.”

He said that the authority had previously recorded information about certain courses on an estimated basis and then later reconciled it on an annual basis. However, the EU wanted the actual expenditure recorded and this system change would be introduced.

Mr O’Toole apologised to persons who had completed some Fás courses but had not been issued with certificates. There had been a problem in this area but the authority would resolve it as soon as it could.

He said that the organisation was going through a fundamental change and the issue of a new name could come up in that context.

Policy and budget functions in the authority’s employment and community services divisions are to be transferred to the Department of Social Protection on October 1st. Operational functions in these areas will be transferred once the required legislation is passed. This will involve about half of the authority being transferred.

The authority will emerge as a re-focused skills agency at the end of a strategic review, Mr O’Toole said. Fás staff were doing their best for the large number of people now out of work, he said.

There are three main items on the board’s agenda – the organisation’s current performance, issues surrounding contracted training and the strategy for the future of its operations.

Ruairí Quinn of the Labour Party has suggested that Fás should be closed down but Eamon Devoy, general secretary of the Technical Engineering Union, said that Fás needed renewal but not dismantling.

“Fás is carrying out its core activities extremely well,” he said.

The Irish Examiner reports that homebuyers are putting their properties at risk by prioritising personal debts, such as credit cards, ahead of mortgage arrears, warns one industry expert.

Debt Management Association of Ireland (DMAI) chief executive Eugene McDarby warned consumers against going into arrears during any mortgage restructuring. Those arrears will inevitably lead to extra charges.

He said putting mortgage arrears on the back burner could see consumers plunge, unwittingly, into deeper debt. The warning comes at a time when consumers owe in excess of €180 billion and are now one of the most indebted populations in Europe, he said.

"I am concerned, now that interest rates have jumped, that mortgage holders will opt now for interest-only mortgages, or consider a moratorium to alleviate the burden of their monthly mortgage repayment. The problem is that this is usually done for all the wrong reasons – ie to pay off other personal debts which are secondary."

Mr McDarby said people are getting into mortgage arrears not only because their income has dropped but also because they are paying non-priority creditors ahead of their mortgage lender. He warned that this is dangerous and irresponsible but has come about, he said, because of the pressure tactics being used by unsecured creditors to get paid quickly.

"People mistakenly believe that if they pay unsecured debt first – ie, credit cards, store cards and other loans – ahead of their mortgage that their mortgage can be restructured into an interest-only loan.

"This is a false economy, and it will only plunge the unsuspecting consumer into further, deeper debt," he added.

The DMAI chief executive said that this ill-advised approach to debt repayment has come about due to people’s failure to understand the difference between secured debt and unsecured debt.

He warns that people could lose their homes if the creditor who "shouts loudest" is the one that gets paid quickest.

He advises under-pressure mortgage holders to pay what they can during any restructuring process. Should they go into arrears, they will incur unnecessary charges on their mortgage in the longer term.

Early intervention is crucial. He also urges mortgage holders to seek instead a capital and interest repayment scheme and a restructure over a longer term as an alternative solution.

There have been cases where building societies won’t restructure mortgage repayments until arrears are cleared, which is why it’s important not to go into arrears in the first place, he said.

Although legislation for the debt management industry has not been introduced yet, McDarby said lenders are normally open to professional debt management plans if they believe they are being treated fairly and the borrower is doing their utmost to pay the debts off as quickly as possible.

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