The head of KBC Bank in Brussels told investors that a merger of
its Irish unit with a rival is not on the cards.
However, a sale of KBC Ireland could happen after the unit returns to profit,
targeted for 2016.
The comments will be seen as a blow to RBS's hopes of engineering a tie-up
between its Ulster Bank unit here and a potential partner – possibly KBC or
Permanent TSB – to create a so called "challenger" to AIB and Bank of Ireland.
KBC did look at the option of merging its Irish banking unit with the Irish unit
of another, undisclosed lender, KBC Group chief executive officer Johan Thijs
However, it opted not to enter talks about a potential deal because, in its
view, criteria such as price and capital position meant it was not a realistic
option, Mr Thijs said.
He was speaking at the bank's Investor Day in Brussels.
The U.S. Federal Reserve is widely expected to chop another $10bn
from its monthly bond purchases at a meeting this week but make few, if any,
other concrete policy moves.
Given the lack of drama, all eyes will be focused on whether officials tip their
hand on longer-term plans for interest rates.
Policymakers, including new Fed Vice Chair Stanley Fischer, will release updated
projections for the economy and for when they think rates should finally rise
from near zero. They could also surprise investors with more detail on how they
plan to eventually shrink the U.S. central bank's swollen balance sheet.
The policy-making Federal Open Market Committee (FOMC) kicked off its meeting
Tuesday at 10 a.m. Eastern (1400 GMT) with a special discussion on the mechanics
of how to raise rates when the time comes, jointly with the Fed's Board of
Here are the key things to watch in the policy statement and economic
projections, which will be released on Wednesday at 2 p.m. (1800 GMT), and in a
news conference by Fed Chair Janet Yellen that will start a half hour later:
* Is the Fed more upbeat on employment and inflation?
The economy has bounced back from a tough winter. More than 200,000 jobs were
added in each of the last four months, lifting U.S. employment to its
pre-recession peak; inflation has firmed slightly though it's still well below
the Fed's 2-percent goal.
THERE has been a surge in people contacting the
pensions ombudsman as up to €500m is sitting in "lost" accounts.
Ombudsman Paul Kenny said thousands of people who
moved jobs years ago are now finding it difficult to trace their retirement
"I think there are probably thousands of people out there who have pensions that
they cannot find," he said.
Problems locating lost retirement funds can be due to companies going out of
business, but failing to shut down the pension fund.
Or perhaps the company that sponsored the pension has since been taken over, he
People who have moved jobs a number of times and those who have worked abroad
may have misplaced pensions.
"We know that pension providers have numbers – possibly thousands – of orphan
schemes on their books, that should have been wound up, but were not," he said.
US medical device maker Medtronic Inc is raising $16.3bn (€12bn)
in a senior unsecured bridge loan to finance its $42.9bn (€31.7bn) acquisition
of Dublin-based Covidien Plc, banking sources said.
It comes as London-listed drugmaker Shire has hired investment bank Citi as an
adviser, expecting to receive its own takeover approaches following a wave of
deals in the healthcare sector, sources familiar with the matter said.
Much of the dealmaking has been fuelled by US companies including Medtronic
seeking lower tax rates abroad. With Shire's tax base in Ireland – where
effective corporate tax rates are among the lowest in the world – and a
mid-sized market value of around $35bn, (€25.8bn) it is seen as a prime target,
analysts and bankers believe
Up to €40 billion, or almost half, of the annual profits made by
Irish-registered companies fall outside the corporate tax net because so many
multinational subsidiaries here declare they are tax resident elsewhere, it was
claimed at an Oireachtas committee meeting yesterday.
Jim Stewart, an associate professor of finance at Trinity College Dublin who
studies the tax avoidance practices of multinationals, told the subcommittee on
global taxation that many US multinationals paid tax “where it suits them”.
“If you put your name on a shoebox somewhere for six months, you can get your
tax residency there,” said Dr Stewart. Using figures for 2011, he has estimated
that about €83 billion of “profit-type” earnings were attributable to Irish
companies that year.
Are American companies stupid to pay corporate tax in Ireland?
Australia’s Coles supermarket chain faces fines of up to $3.3
million (€ 2.27million) for passing off bread as “fresh, baked today and sold
today” when in fact it had been first baked in Ireland, Denmark and Germany
Investigators from the Australian Competition and Consumer Commission (ACCC)
said the bread had in fact been made on the other side of the world before being
frozen and transported to Australia.
ACCC launched proceedings against Coles a year ago, accusing the company of
Martin Wolf: How much of the world’s fossil fuel reserves will
eventually be burnt? This is not just a question for those concerned with
climate policy. It is also a question for investors even if they believe
(absurdly, in my view) that the science of climate change is a hoax. What, they
must ask themselves, would it mean for my investments
in fossil fuel exploration and production if policymakers acted on their
expressed belief in the science of climate change?
Where would that leave investments in companies that own reserves today and are
investing in exploration and additional production for tomorrow? Might all this
spending prove a disastrous waste of resources that would be better deployed
Japan’s annual exports declined for the first time in 15 months
in May as shipments to Asia and the United States fell, threatening to knock the
economy hard at a time when domestic consumption is being crimped by a national
sales tax increase.
The data backs expectations for additional stimulus from the Bank of Japan in
coming months, particularly if market confidence takes a hit as external demand
Total exports fell 2.7 per cent May on the year, Ministry of Finance data showed
on Wednesday, compared with a 1.2 per cent drop seen by economists and a 5.1 per
cent rise in April. On a seasonally adjusted basis, exports fell 1.2 per cent in
May from the prior month.
The central bank is counting on exports growth to partially offset the impact of
a sales tax hike to 8 per cent from 5 per cent in April, but the MOF data will
be a worry for policy makers.
Joe Gill: It is time to put the Employment and Investment Incentive Scheme out
of its misery.
It was introduced by the Government in 2011 as a means of connecting individual
investors with SME companies for the purpose of growth and expansion. It has
failed, and a new version of it is urgently required.
The scheme was invented as a replacement for the Business Expansion Scheme (BES)
which had worked reasonably well as a source of company funding. IBEC states
about €44m was raised on average each year between 2003 and 2007 to help promote
and stimulate company expansion using BES. The investors, in exchange, received
a tax break for providing low risk capital to private companies.
The Employment and Investment Incentive Scheme, in contrast, has been a poor
substitute. Funding in 2013 fell away to about €12m as investors deemed it
complicated, relatively risky, and offering low upside. Without a overhaul
designed to introduce a simple system that offers reasonable upside, the scheme
will struggle to provide much-needed equity capital to SMEs.
Euro Topics: The advance of the radical Islamic
organisation Isil has prompted the US to send soldiers to Iraq again for the
first time in two and a half years. A special unit comprising 275 troops is
being sent to protect American citizens, US President Barack Obama announced.
This new deployment highlights once more the futility of the US invasion in
2003, commentators say and voice fears that terrorism may now take on epic
Isil also a threat for the West: The founding of a theocracy in Iraq by the
Islamist militia Isil would pose a huge threat to the entire West, the
conservative Spanish daily ABC warns: "No Western country should feel unaffected
by the advance of the jihadists in Iraq. Because if Iraq falls into the hands of
an al-Qaeda affiliated organisation this would have incalculable consequences
for a region prone to the domino effect of civil wars and sectarian conflicts.
... If after Iraq Syria also fell into the hands of the terrorists, we would
witness an unprecedented expansion of terrorism. ... Although there have been no
major attacks in Europe in recent years, this should not fool us into thinking
that the threat no longer exists. ... Terrorism takes on different forms, and
not always do they have the dimensions of 9/11 or 11-M [the attack on a train
station in Madrid on 11 March 2004]."
Islamists face Obama with dilemma: The US has not ruled out the possibility
of negotiations with Iran in the fight against the terrorist movement Isil.
The conflict in Iraq faces President Obama with a huge dilemma, the left-liberal
Dutch daily De Volkskrant comments: "On the one hand it's logical: Isil is a
common enemy. On the other hand the US sees Iran as the biggest strategic threat
in the Middle East because of its nuclear programme and its support for Syrian
President Assad. How easily can you convert an enemy into a shorter- or
longer-term friend? Does this mean that Assad can not only stay put, but will
also become a partner in the fight against Isil? ... There is a growing danger
that America must not only wrestle with the question of what kind of a
superpower it wants to be, but that it no longer knows who its true friends and
It's no longer about Juncker: The social democrats in the European Parliament
announced on Tuesday that they would make their support for Jean-Claude Juncker
conditional on a loosening of the Stability Pact. That shows that the
question of whether Juncker is the right man for the job has long since become
secondary, the left-liberal German daily Süddeutsche Zeitung writes: "The main
thing is that the name Juncker has become the catch-all phrase for a
fundamental, long-overdue discussion. The national governments must agree on how
the Europe of the future should be shaped. ... Demonstrating a common will to
reform would require a cleverly presented package listing European policy
priorities, together with the readiness to implement them. And on top of that a
set of personnel decisions agreed on with the EU Parliament."
Work must be worthwhile in Denmark too: According to an estimate by the
Danish Finance Ministry, roughly 42,500 employees in the country earn less after
taxes than welfare recipients. That's simply unacceptable, the
liberal-conservative daily Berlingske writes: "The Finance Ministry's figures
point to very problematic conditions in a country where hard-working taxpayers
toil away under the highest tax burden in the world, while each year 300 billion
kroner [roughly 40 billion euros] are distributed in welfare payments. There is
an untenable imbalance between the money citizens are allowed to keep and manage
for themselves and the money that is generously doled out by the public
authorities. This imbalance must be corrected. We must put an end to this
redistribution farce that few people really understand."