PAY talks are set to begin at the country's two largest banks
after a five-year wage freeze for thousands of workers.
The Irish Bank Officials Association which represents 6,000 staff at Bank of
Ireland, said pay increases were back on the agenda after the bank's return to
profitability. It is carrying out a review of pay at the bank, though no pay
claim has yet been lodged.
The IBOA is expected to begin similar negotiations at AIB, where it represents
6,500 staff, and which is also back in profit.
The union is the latest to seek wage improvements following a series of pay
increases in other sectors, as the economy shows signs of recovery.
Employers including Tesco, Boots, Brown Thomas, Debenhams, Dunnes Stores, Marks
& Spencer, Glanbia, and Medtronic, have already agreed to wage rises in the
region of 2pc to 3pc.
In March, bailed-out Bank of Ireland became the first major bank to return to
profit since the financial crash, following pre-tax losses of €569m last year.
SIX homes in a new social housing estate in Drogheda are to be
demolished because of pyrite.
The pyrite was discovered in building blocks and it is understood to be one of
four sites – including an €8.6m school extension in north Dublin – known to be
Chemical tests are currently being carried out on the walls of the 1,000-student
Ardgillan community school, and a detailed report will be provided for the
Department of Education.
Residents of the affected 25-house Drogheda scheme were due to move into the
homes at Christmas.
However, six of the houses are scheduled for demolition today, and there is also
uncertainty about the future of other dwellings in the cluster.
Among those affected by the disruption to the scheme are a number of people with
disabilities, including a child.
Ulster Bank is at risk of losing control of almost 50,000 Irish
mortgages to bondholders as a result of credit rating downgrades by Moody's.
Individual mortgages would not be affected if the accounts – which were bundled
together by the bank to be used to borrow on the markets – were taken over by
bondholders acting through trustee Deutsche Bank.
But homeowners would get a letter telling them of the change.
Ulster Bank borrowed against the Irish mortgages during the boom through a
process called securitisation.
That process saw as much as €10bn raised by the bank on the market using the
mortgages as collateral. As part of that scheme the bank committed to protect
the value of the security for the life of the deals – which run until as late as
2047 and 2055 in some cases.
Six separate notices were issued on the Irish Stock Exchange on Friday night
warning that Ulster Bank had fallen outside the terms of its securitisation
agreements which included to "maintain ratings on its long-term unsecured,
unsubordinated, unguaranteed debt obligations equal to or greater than BBB by
S&P or Baa2 by Moody's".
Christine Lagarde has asked whether she needs to grovel on her
knees before George Osborne over the IMF’s incorrect warnings on the UK economy,
as she warned against raising taxes.
“Do I have to go on my knees?” Ms Lagarde, the head of the International
Monetary Fund said, when asked whether she has apologised to George Osborne over
the fund’s low growth forecasts and calls to adopt a ‘Plan B’ of less austerity
– calls the body now accept it got wrong.
The growth the UK is enjoying now has “resulted” from George Osborne’s policies,
she said. The growth now appears to be “pretty sustainable” because it is being
driven by private sector investment as well as households consuming more.
A year ago Oliver Blanchard, the IMF’s chief economist, warned Mr Osborne was
“playing with fire” with austerity and downgraded Britain’s growth forecast to
just 0.7pc for 2013. Instead, it grew by 1.7pc, and is expected to hit 2.7pc
“We got it wrong,” Ms Lagarde told the Andrew Marr Show. “We acknowledged it.
Clearly the confidence building that has resulted from the economic policies
adopted by the government has surprised many of us.”
Merrill Lynch International Bank (MLIB), Ireland’s largest bank
when measured by the size of its balance sheet, shifted a net $84 billion worth
of financial assets out of Ireland to the UK over the last year.
The total amount shifted by the bank over the last two years is $187 billion,
meaning assets roughly equivalent in size to the entire Bank of Ireland group
have disappeared from the Irish financial sector since the end of 2011.
The figures are contained in the 2013 accounts for MLIB, the main international
arm of the giant Bank of America Merrill Lynch corporation, which were filed in
recent days at the Companies Registration Office.
The other day I gave a talk to about 80 middle-aged, mainly male
tax experts. I asked them to put up their hands if they considered themselves to
be passionate about their work. About half of them stuck their arms in the air
at once, and the rest, seeing which way the mood was going, hastily put theirs
There was nothing obviously passionate about these men; they looked wan and
defeated after a morning spent watching someone go through a couple of hundred
slides on the niceties of transfer pricing. But their response did not surprise
me in the least.
An Indian banker on a mission to build a people-focused
financial-services giant has been crowned EY World Entrepreneur of the Year.
Uday Kotak fought off stiff competition from 10,000 entrepreneurs in more than
50 countries worldwide to take the award at a gala ceremony in Monaco on
Turning down a steady job, Mr Kotak took his chances in a highly regulated,
closed economy and founded Kotak Mahindra Bank in 1985 with seed money of
$250,000. He said he noticed India’s main banks were lending money at 17 per
cent and only paying depositors 6 per cent. “The banks were getting an 11-point
spread . . . state-owned banks that were supposed to be building society.”
Aer Lingus has described the planned strikes by cabin crew at the
airline next week as “reckless and “unwarranted”.
In a letter sent yesterday to the trade union Impact, which represents the cabin
crew, the airline urged an immediate withdrawal of the notice of the work
stoppages which are planned to take place on Monday June 16th and Wednesday June
Aer Lingus accused Impact of cynically distorting its position in talks last
week to generate a contrived basis for announcing further strike action. The
company said that Impact had inaccurately suggested that management had walked
out of talks last week which were aimed at resolving a row over rosters.
Solely relying on traditional bank credit will only inhibit
growth and job creation in SMEs, a new survey has warned.
The study — carried out by market research company, Behaviour & Attitudes on
behalf of leading SME funder, Bibby Financial Services Ireland (BFSI) — claims
that nearly three quarters of Irish SMEs don’t shop around enough when seeking
credit and that banks aren’t in a position to adequately finance the needs of
the small business community.
“The traditional banking model is outdated and no longer in a position to
adequately finance the range of varied funding requirements of SMEs,” according
to BFSI managing director, Ronan Horgan.
Euro Topics: ECB can't ensure recovery on its
own: The members of the Eurozone must also do their bit to ensure economic
recovery, The Financial Times comments: "There will always be limits to how
far monetary policy alone can turn round the eurozone economy. Mr Draghi may be
an able central banking tactician but he is not a magician, capable of conjuring
recovery from thin air. Other measures will be needed. If the ECB's Asset
Quality Review finds big holes in banks' capital, the eurozone will need a plan
to fill them. No revival of bank lending is likely until the sector is soundly
capitalised. National governments must also look to their responsibilities. Many
eurozone states, notably France, and Italy, need to complete structural reforms
to boost competitiveness."
Raising salaries better than cutting interest: A completely different
approach is needed in the fight against deflation, the liberal French weekly
Marianne believes: "If there's a threat of deflation, the Eurozone
governments' policy of cutting salaries and budgets is to blame. ... The
simplest, quickest and most efficient solution is not to make cheaper money
available, but to increase buying power so that consumption strengthens the
economy and drives up prices. ... But even simpler than that would be to just
raise salaries. ... Rising salaries and prices, shrinking deficits, new export
markets for products, new jobs. ... That's what progress looks like. It's time
to remember the meaning of this word."
G7 puts too little pressure on Russia: The G7 states agreed on concrete
demands vis-à-vis Russia at their summit on Thursday. Among other things the
Moscow leadership is to stem the flow of separatists and weapons into eastern
Ukraine, otherwise it will face further sanctions. The agreed measures aren't
tough enough and pave the way for disaster, the German news portal tagesschau.de
comments: "An important demand, if not the most important, is Russia's
withdrawal from the Crimean Peninsula - where the occupation began. But that,
German Chancellor Angela Merkel said at the end of the summit, was not even
discussed. There's also a lack of consensus on what to do about the ongoing
fighting in south-eastern Ukraine - whether that alone is not enough to trigger
sanctions. But instead the deadline is to be extended until the end of June -
and then they'll see whether any progress has been made. Meanwhile eastern
Ukraine is facing a humanitarian disaster."
Double strategy needed with Putin: French
President François Hollande on Thursday welcomed Vladimir Putin at the Elysée
Palace a day before the D-Day 70th anniversary celebrations - and shortly after
the G7 states jointly threatened Russia with stiffer sanctions. This double
strategy vis-à-vis Moscow is necessary, the Christian social Dutch daily Trouw
observes: "It would be so much better for peace on the European continent if the
countries that fought together against the Nazis 70 years ago were once again
allies - this time fighting for democracy and human rights. That this is not the
case is mainly because of Putin. His autocratic style in his own country, and
above all his aggression against neighbouring Ukraine make it impossible for the
US and Europe to maintain normal relations with Russia. ... This demands two
types of policy: punitive measures to set limits. And diplomacy to seek