| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Irish Last Updated: Feb 12, 2013 - 8:52 AM

Tuesday Newspaper Review - Irish Business News and International Stories - - February 12, 2013
By Finfacts Team
Feb 12, 2013 - 8:48 AM

Email this article
 Printer friendly page

The Irish Independent reports that former Irish Nationwide boss Michael Fingleton ran the financial institution for 37 years with no computer access in his office.

It has emerged that new management at the financial institution inspected his office after his resignation four years ago and found that he had no access to the building society's computer network.

The revelation is among a number of new claims about Mr Fingleton's decades-long tenure as chief executive of the bust building society.

A former director of Irish Nationwide said that Mr Fingleton admitted to him he ran it as a "sole proprietor".

And the defunct building society was found to have "highly unusual" management practices, according to a consultants' report. The report by accountancy firm Ernst & Young and law firm McCann Fitzgerald was commissioned by Mr Fingleton's successor Gerry McGinn after his resignation in 2009. Details of the report were revealed last night on RTE documentary 'Inside Irish Nationwide'.

Forensic accountant Michael Flynn, who examined the report for the programme, said: "The absence of documentation for this amount of money is absolutely staggering."

The report found that:

• Lending files were "brief" and loans were "poorly structured".

• There was no paperwork in relation to a €10m figure used to settle a legal dispute.

• A mysterious €6.6m consultancy fee payment to a Jersey-based trust company was undocumented.

• €435,000 was paid to a company that did not exist at the address stated when checked by Ernst & Young.

• Invoices to the value of €2m, which had been paid for twice, went un-investigated.

The report also found that Mr Fingleton had been granted special powers by the building society's board in the 1980s and 90s, allowing him to set interest rates and loan conditions without consulting other directors.

It found that the powers allowed for the circumvention of the institution's credit committee and that this was "highly unusual and contrary to normal practices".

The Irish Independent also reports that senior government ministers have promised backbenchers they will shoot down any plans to include farm and business assets in the means test for student grants.

The Fine Gael ministers have said the controversial plan will not get past them when Education Minister Ruairi Quinn brings it to the cabinet table, which is expected to happen in the coming weeks.

Mr Quinn's department sent out a memo on the policy to fellow ministers in recent days, and has received some observations back, as per normal practice.

However, sources said the response has been "very much a mixture" of opinion, and when asked if Mr Quinn was confident of getting the proposals approved, his spokeswoman would only say: "It's a cabinet decision, Cabinet will decide on this."

It is understood those with serious reservations include Taoiseach Enda Kenny himself, Finance Minister Michael Noonan, Agriculture Minister Simon Coveney, Environment Minister Phil Hogan, Arts Minister Jimmy Deenihan and Chief Whip Paul Kehoe – although Mr Kehoe does not have a vote.

The review of the means test has been a long-running source of tension in the Coalition because many Fine Gael TDs rely on votes from farm families and small business owners.

Waterford TD John Deasy said he raised the controversial proposal with senior Fine Gael ministers and was assured it would "not be entertained" and "will not pass Cabinet".

It comes as the latest opinion polls show support for Fine Gael has dropped substantially among farmers, with Fianna Fail overtaking the senior coalition partner.


Mr Quinn is planning to mount a five-year trawl of assets owned by farmers and business people whose children are applying for the college grant in September.

He intends to include assets in excess of €750,000, on top of how much income is being earned.

The Irish Times reports that private capital could be used to contribute to bank recapitalisation alongside capital injections from the euro zone’s rescue fund under a proposal discussed by euro zone finance ministers.

The design of the European Stability Mechanism (ESM) direct recapitalisation instrument, including the possibility of attracting private capital, was discussed at yesterday’s meeting of finance ministers.

Euro group chairman Jeroen Dijsselbloem said discussion of legacy assets and retrospective recapitalisation would be considered in subsequent months.

S&P upgrades Irish rating 

He added that finance ministers would discuss how best to support Ireland and Portugal in successfully exiting their programmes and fully returning to market finance at next month’s meeting. His comments came as ratings agency Standard & Poors upgraded Ireland’s outlook yesterday from negative to stable on the back of last week’s promissory note deal.

Euro zone finance ministers are expected to deliver their verdict next month on those countries’ request for an extension of certain loan maturities.

Speaking after the meeting, Mr Dijsselbloem said the euro group had been informed by Minister for Finance Michael Noonan of last week’s developments regarding Irish Bank Resolution Corporation (IBRC).

“We welcome the solution found by the Irish authorities for the replacement of the promissory notes and the winding down of IBRC,” he said. “This will lower the cost of restructuring Ireland’s financial sector, which will be positive to complete Ireland’s return to the markets.”

His comments were echoed by EU economic and monetary affairs commissioner Olli Rehn, who described last week’s deal as “a major step” for Ireland.

“This has further boosted market confidence and will certainly help to facilitate any subsequent outcome.”

Both also noted the positive assessment of Ireland contained in the ninth quarterly review of Ireland published last week by the troika of the European Union, European Central Bank and International Monetary Fund.

Speaking ahead of yesterday’s meeting, Mr Noonan said Ireland’s bid to secure ESM direct recapitalisation for AIB and Bank of Ireland was a “medium-term strategy”.

“We’re at the early stage. This is not something that is going to conclude quickly; this is a medium-term strategy but with the ground we’ve gained on the promissory note arrangement we can afford to wait for the next phase as long as the commitment that was made on 29th June last is still the commitment,” he said.

Ireland is hoping the euro zone’s rescue fund, the ESM, can be used to directly recapitalise both banks.

Cyprus bailout 

Yesterday’s meeting of finance ministers also discussed the bailout of Cyprus, with Mr Dijsselbloem refusing to rule out the possibility that depositors could be affected by the deal.

While negotiations on a €17.5 billion rescue programme began late last year, disagreement has emerged about how the bailout should be funded amid concerns about Russian involvement in money-laundering in the country.

Speaking after the meeting, Cypriot finance minister Vassos Shiarly said the so-called bail-in of depositors was a “grossly exaggerated possibility” and “unlikely to happen”.

Mr Dijsselbloem confirmed yesterday that euro zone finance ministers had decided to appoint an independent firm to assess allegations of money-laundering in Cyprus. A final deal is expected to be agreed in March, after Cypriot elections.

The Irish Times also reports that Standard & Poor’s last night became the first ratings agency to improve their outlook on Irish debt on the back of last week’s promissory note deal.

In an early sign that last week’s replacement of the promissory notes used to bailout bank creditors with longer term government bonds will improve the State’s solvency, the credit rating agency changed its Ireland outlook from “negative” to “stable”.

It did not change the ratings band within which it classifies the Irish State. That remains at “BBB+”, seven notches below the top triple A rating, but above speculative or “junk” status.

The agency said it would consider raising its rating “if the Government sustains its fiscal strategy [and/or] can sell its sizable equity position in the domestic banking system to non-resident investors”.

S&P is one of the world’s three largest rating agency’s, along with Moodys and Fitch. The ratings these agencies give to financial assets has a strong influence on the rate of interest issuers must offer. Last night the agency said: “In our opinion, the exchange of promissory notes for long-dated Irish government bonds should reduce the Government’s debt-servicing costs and lower refinancing risk.”

In a statement, the agency said that last week’s deal “increases the likelihood of a full return by Ireland to private financing and, therefore, of Ireland successfully exiting the EU/IMF bailout program, at the end of 2013”.

S&P warned that it could yet downgrade Ireland again. It cited any failure to comply with the terms of the EU-IMF bailout or if the Government “were not able to access the capital markets sufficiently to meet its 2013 funding needs”.

The Irish Examiner reports that the proposed Oireachtas inquiry into the banking crisis could be undermined by the timing of the trial of former Anglo Irish Bank chairman Sean FitzPatrick.

Mr FitzPatrick’s trial is listed for the Criminal Court in Jan 2014. But this would also be the likely start date for an Oireachtas inquiry.

The new Oireachtas (Inquiries, Privileges and Procedures) Bill to cover Oireachtas inquiries is unlikely to be published until the Dáil summer recess.

This means that the preparations for the banking inquiry will not commence until the Dáil resumes in September. The Public Accounts Committee and the Finance Committee are both vying to hold the inquiry.

Informed sources say that the most likely outcome is that a new committee will be formed comprising of members of the PAC and Finance.

A senior legal source says there are risks to holding the inquiry and the trial at the same time. If the Oireachtas inquiry was to hear evidence in public that would be very similar to testimony in the criminal trial, then Mr FitzPatrick’s legal team could argue that it is prejudicial to its client.

There is an option for the Oireachtas of holding private sessions and withholding chapters from its findings at the conclusion of its inquiry. However, the legal source said the Director of Public Prosecution could take the view that the risk of holding the inquiry is too great and request that it be postponed until criminal proceedings against Mr FitzPatrick and other banking executives have been completed.

The complexity of the case against Mr FitzPatrick means court proceedings could be quite lengthy. And there are more charges pending against Mr FitzPatrick and other former Anglo Irish Bank executives.

The Irish banking crisis was the worst ever recorded among any economy in the developed world. Anglo Irish Bank accounted for nearly half of the €64bn it cost to bail out the banks.

The Government backstopped the banking system in Sep 2008 on the basis the sector faced a temporary liquidity problem. The liquidity problem turned into a solvency problem, which forced the Government into an EU/IMF bailout programme in Nov 2010.

There is still a lot of uncertainty over the sequence of events leading to the state guarantee and what the Government knew on the night it was introduced.

The proposed legislation, which is being drawn up by the Minister for Public Expenditure and Reform Brendan Howlin will have the ability to call ex-Taoisigh and ministers before the inquiry, but it will not be able to make adverse findings against any former member of the Oireachtas.

Foreign news reviews and more comprehensive coverage of Irish news is available in our Daily News Digest in the Global category on Finfacts Premium.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

© Copyright 2011 by Finfacts.com

Top of Page

Latest Headlines
Ryanair revises up full-year profit guidance
AIB bank profitable in third quarter
Ryanair announces half-year profits up 32% to €795m
Ryanair benefits from improved customer service
Ryanair to buy 100 new Boeing 737 MAX 200
Finfacts server migration Thursday
State-owned Allied Irish Banks reports H1 2014 profit as bad loan charges plunge
Ryanair reports profit in its financial first quarter soared 152%
UK firm opens van dealership in Dublin
Ryanair reports 8% fall in full-year profit; US services to commence in 2019
Global Financial Centres Index: New York overtakes London; Dublin slips to 66 of 83 cities
Bank of Ireland reports “significant” improvement in 2013 results
Sale process of IBRC UK projects Rock and Salt completed
CRH says 2014 will be year of profit growth after reporting 2013 loss
Ryanair reports third-quarter loss
Irish Water says it saved €100m in setup costs
RSA Insurance fires two Irish executives for large loss/ accounting irregularities
Bank of Ireland will have to raise provisions by €1.4bn; AIB says it's "well capitalised"
CRH reports slightly improved third quarter
Central Bank says ownership of Newbridge Credit Union transferred to permanent tsb
Ryanair reports H1 profits rose by 1% to €602m
Dublin Web Summit: Irish Stock Exchange and NASDAQ OMX announce dual listing plan
Irish pension managed funds returned to growth during September
Dan O’Brien resigns as economics editor of The Irish Times
Central Bank says no action required on Anglo tapes revelations
Ryanair flew 9m passengers and Aer Lingus carried 1.1m in August
UK Competition Commission says Ryanair must cut Aer Lingus stake to 5%
CRH reports H1 2013 revenue dip and loss
Vodafone refunded UK after discovery of Irish tax haven deal
RBS reports half year profit; Ulster Bank posts reduced loss
Bank of Ireland cuts pretax losses in HI 2013 to €504m
Irish State-owned Allied Irish Banks reports losses of €758m in H1 2013
Service Announcement
Irish managed pension funds declined in June
VHI reports 2012 surplus of €54.3m; Health insurance made loss
Ex- Elan director says management / board "not competent to run a business"
Aer Lingus to put €140m in employees pensions fund; Ryanair apoplectic
Wednesday Newspaper Review - Irish Business News and International Stories - - May 22, 2013
Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m - - up 13%