The Irish Independent reports that the parent of KBC Bank Ireland has pumped €125m into the lender as it looks
to expand its business here.
Filings with the companies' office show KBC's headquarters in Brussels
injected the cash into KBC Bank Ireland plc on March 27.
Speaking to the
Irish Independent, a company spokesman said the cash was being used to
fund expansion and was not a shoring up of the business.
KBC is expanding its presence in Ireland and has opened two new retail
offices in Dublin and Cork, with further new offices planned for Limerick and
Galway.
"KBC invested a further €125m by way of share capital investment during the
first quarter in KBC Ireland (KBCI) to support the ongoing development of KBCI's
business in Ireland. KBCI's Tier 1 capital ratio at December 31 was in excess of
11pc," the spokesman said.
Market
The bank has been investing heavily in building awareness of its brand and
has successfully entered the retail deposit market. The bank is also planning to
launch a current account later this year, the spokesman added.
KBC was formerly IIB bank but the Belgian lender has held at least a majority
stake in the business since 1978.
Last year KBC Ireland saw its loss widen to €306m from €269m a year earlier
as loan impairment costs headed toward €550m.
KBC said that 2012 was a year of "continued, unacceptably high credit costs''
for the bank as those mortgage arrears in its residential loan book continued to
increase, while "collateral values" in its commercial banking book were hit by
the ongoing contraction in the Irish market.
The bank's overall loan portfolio fell to €16bn from €16.7bn in 2011 due to
what it called "muted economic activity and limited new business demand", as
well as the cost of increased loan repayments.
Speaking on their release in February, chief executive John Reynolds said the
results reflected an "unsatisfactory business performance".
"We had signalled that we expected conditions to remain challenging in 2012
and this proved the case. However, we anticipate increasing economic stability
will lead to more sustainable conditions in 2013, with the bank hoping for
reduced credit cost in the year ahead,'' he added.
"KBC Group is a strong and profitable entity and is committed to
developing its business in Ireland.
"We recognise the opportunity in Ireland's recovery and are positioning
to play our part in that recovery, despite the challenges that remain as Ireland
seeks to develop a more sustainable banking sector,'' he added.
KBC has about 10pc of the State's mortgage market and is now looking to
increase its retail footprint significantly.
The Irish Independent also reports that
employers providing defined-benefit pensions have been told they would serve
their staff best by closing the schemes down.
Workers should be provided with a defined-contribution scheme instead, where
no other workers would have a call on their expected pension.
Chief investment officer with IFG Corporate Pensions Samantha McConnell said
that most employees under the age of 45 who are in a defined benefit scheme were
set to get little or nothing.
This was because eight out of 10 defined-benefit plans are in deficit, while
pensioners have first call on the assets.
Defined-benefit schemes promise to pay a set level of pension, depending on
the years of service. But the promises have become impossible to keep because
people are living longer and investment returns have been too low.
Value
Ms McConnell said: "Defined-benefit schemes may be seen as a valuable
benefit, but they only have a value if there is something there at the end."
Ms McConnell pointed to the fact that defined-contribution schemes are more
cost-effective for employers as the average contribution is 6pc of a monthly
salary, compared with 17pc in a defined-benefit scheme.
She said that being part of a defined-contribution scheme would offer
employees certainty that didn't exist with a defined-benefit scheme.
"As an employee, you own whatever is in the defined-contribution pot – with
defined-benefit schemes, the benefits are a promise, not a guarantee," she
added.
Benefits are being reduced or schemes are shutting at AIB, Independent News
and Media, the publisher of the Irish Independent, and Grafton.
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The Irish Times reports that
some people may see their property tax charge being immediately deducted from
their bank accounts, the Revenue Commissioners have pointed out. The timing of
the deduction depends on the payment method chosen.
A spokeswoman for the Revenue pointed out the range of payment options available
after a reader wrote to this newspaper complaining that the charge had been
immediately deducted from his account when he had believed the money would be
deducted “no earlier than 21st July 2013”.
A range of payment options, including phased payments, is available, including
deduction at source from a salary or occupational pension. In such cases the
money will be deducted from the first salary or pension payment made in the
month of July.
The tax can also be deducted at source from payments received from the
Department of Social Protection or Agriculture, Food and the Marine, again
commencing from the first payment in July.
Direct debits will be debited from July 15th, and a single debit authority from
July 21st.
Payments made online using a debit or credit card result in the full amount of
the charge being charged to the account on the day the payment method is
selected online.
People who pay the tax using a Mastercard or Visa credit card have to pay an
additional 1.49 per cent service charge.
The tax involves house owners having to value their property, calculate their
liability, and submit their return by the the relevant deadline.
The size of the tax due depends on the estimated value of the property concerned
in May. Property with a value of up to €1 million will generate a tax charge of
0.18 per cent. Property with a value of more than €1 million creates a charge of
0.18 per cent for the first €1 million in value and 0.25 per cent for the value
thereafter.
The Irish Times also reports that middle-grade civil servants have strongly backed the proposed new Croke Park
agreement in a ballot.
Members of the Public Service Executive Union (PSEU) have voted by 61 per cent
to 39 per cent in favour of the proposed new deal.
There was a 74 per cent turnout in the ballot.
The PSEU is the first of the larger public service unions to support the
proposed agr eement in a ballot.
Two other unions, representing relatively small numbers of craft workers mainly
in local authorities and the health service have also backed the deal.
However members of eight unions have voted to reject the proposed Croke Park II
agreement.
A series of other unions are scheduled to announce the results of their ballots
today.
A key vote will be Siptu which has around 63,000 members in the public service.
Some sources have maintained that the Siptu vote will be very tight.
If Siptu members vote against the proposed deal, it will effectively be dead in
the water as it could not be ratifed by the public service committee of the
Irish Congress of Trade Unions without its support.
The Irish Examiner reports that
a briefing issued by Revenue said it would not pursue mortgage holders who
had a portion of their debts written off, but tax experts expect a raft of
audits to make sure that bogus write-offs are not being created to lower tax
bills.
The Capital Acquisitions Tax Consolidation Act 2003 states that, under any
circumstance other than inheritance, a person who becomes “beneficially entitled
in possession” to goods, property, or money will be subject to tax.
Christine Keily, tax analyst with Taxback.com, said the existing legislation
meant people were changing from owing money to the banks to owing money to
Revenue.
“Under Capital Acquisitions Tax Consolidation Act 2003 legislation, an
individual is deemed to take a gift, and potentially generate a tax liability,
where they receive a benefit unless they have paid full market value for that
benefit.
“Furthermore, under Capital Acquisitions Tax Consolidation Act 2003 legislation,
a person could be deemed to receive such a taxable benefit in circumstances
whereby a debt is released.
“So, the big question here was whether debt forgiveness by the banks would
trigger such a tax liability? With so many people in financial difficulty, the
prospect of replacing the chasing bank with the tougher Revenue Commissioners
wasn’t going to assist in their financial recovery, and therefore, a solution
needed to be found.”
The Revenue clarification will be welcomed by people who had taken out
buy-to-let mortgages and were now unable to repay them, she said.
“The Revenue’s e-brief provides that, where such a debt is released by a
financial institution for bona fide commercial reasons, Revenue’s approach will
be that the financial institution did not make a gift of any sort to the
individual.
“This means that the individual would not acquire a Capital Acquisitions Tax
Consolidation Act 2003 charge in respect of any such debt restructuring,
forgiveness or write-off arrangement.”
The news that Revenue will not seek to claw back parts of debt settlements from
buy-to-let mortgage holders will be welcomed by thousands of investment property
owners.
According to Central Bank figures, 28,421 buy-to-let mortgages were in arrears
of more than 90 days by the end of December, compared to 27,018 at the end of
September.
However, despite the news that people will not be taxed on restructuring their
mortgages, Taxback.com believes Revenue will open audits and investigations into
arrangements to check they are not orchestrated for the avoidance of tax.
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