Wednesday 4th September 2013
BoI chief Richie Boucher says debt forgiveness is not the bank’s policy
Committee hears 11,774 mortgages in default, and 3,103 are in legal or resolution process
Bank of Ireland chief executive Richie Boucher arriving at Leinster House today.
Bank of Ireland has attempted to defend its dealings with distressed mortgage holders saying it cannot do special deals as it has to remain profitable.
Speaking at the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, Bank of Ireland chief executive Richie Boucher said the institution was offering deals to customers that it was confident would help to keep them in their homes.
Mr Boucher said debt forgiveness was “not a policy of the bank” as it had responsibilities to a wide range of stakeholders – including the Irish State and taxpayer, which has been repaid some €3.9 billion of the €4.8 billion invested in Bank of Ireland.
He said that if the bank is not profitable, it cannot lend money into the economy and repay the State which could well mean that citizens would face higher taxes or diminished services.
Asked about forbearance by committee chairman Ciarán Lynch , Mr Boucher said any loss arising from a deal a with customer was “a cost to the bank”.
“Unless there are exceptional circumstances, we don’t believe that a restructure is possible unless the customer can meet the full interest on the mortgage.”
The bank was criticised during the hearing, which set out toCentral Bank targets for sustainable solutions to mortgage distress, for failing to provide detailed figures and over the nature of its split-mortgage offering, which does not freeze interest charges on the warehoused element.
Independent TD Stephen Donnelly told Mr Boucher that almost all of the bank’s restructuring deals resulted in mortgage holders paying back a higher amount of capital.
Mr Boucher said that restructuring mortgages and loans cost the bank money and that these additional costs had to be met.
Mr Donnelly said 90 per cent at least of these restructuring deals increased the indebtedness of households, and that banks were profiting from mistakes people made in the past but also their own mistakes in lending money.
More broadly, Mr Boucher said the number of Bank of Ireland customers in early arrears fell in “June, July and August”.
He told the committee that 11,774 mortgages were in default at the end of March and that by the end of June some 3,103 of those were in a legal or resolution processand 3,164 had been restructured or cured.
At 53 per cent of cases, this was far above the Central Bank’s target of finding a sustainable solution in 20 per cent of cases.
“Our arrears reflect economic and affordability issues. We continue to monitor our portfolios and we do not believe negative equity is a driver of default. it is primarily where customers have income issues,” he said.
On the subject of Priory Hall, Mr Boucher said up to eight former residents of the apartment complex had owner occupier mortgages with the bank.
The majority of these had nominated a third party to engage with the bank, he said, and discussions were ongoing.
He said he could not give any specific commitment with regard to Priory Hall, which has been vacated for some time as a result of safety concerns, but that he would be keeping an eye on how other banks approached mortgage holders.
Water bill fears ease for larger Irish families
The larger the family, the greater the free water allowance, Environment Minister Phil Hogan has proposed.
Mr Hogan said he favours a certain allowance for families that will take into account the numbers living under one roof.
He said that there will also be some illnesses and “extenuating circumstances” that require people to use a lot more water.
Irish Water has been directed by the Environment Minister that the number of people in the house will have to be taken into account in applying charges.
Water charges are coming into effect from October next year, but the first bills will not land until January 2015.
Homeowners will have to pay a standing charge for the metering system and will receive a free allowance of water to give them a very basic supply. Any use above that amount will be charged at a rate yet to be determined.
There has been ongoing debate over whether the amount of free water allocated should be based simply on the size of the house, or on the number of people living there.
The system that had been favoured by the operator was one solely based on the size of the house.
However, this led to claims that large families with children faced being discriminated against under the new water-charging regime.
The energy regulator will decide by Christmas how the system will operate.
Mr Hogan said he has given a commitment that there will be a free allowance for all families, he said.
He said that there will be affordability measures which will take into account ill health, or disability, or “large families on low incomes”.
Positive Irish economic data fuel hopes of an economic recovery
Unemployment rate drops again as services sector growth hits six-year high
Unemployment fell again last month and the country’s services sector grew at its fastest rate in six years, underpinning hopes the economy may be finally turning a corner.
Optimism was further fuelled by a series of positive business surveys from Europe and China, pointing to an upswing in the global economy.
For the fourth month in a row, the number of people claiming unemployment benefit in the Republic fell.
The latest Live Register figures indicated the numbers signing on the dole dropped by 3,400 in August, giving rise to a standardised unemployment rate of 13.4 per cent, down from 13.5 per cent in July.
On an unadjusted basis, there were 435,280 people on the register last month, representing an annual decrease of 20,976 or 4.6 per cent.
The figures suggested 45% of those on the register have been out of work for at least one year, the lowest rate since mid-2009.
Minister for Social Protection Joan Burton said the figures provided concrete proof that the Government “was making progress in getting people back to work”.
However, the Irish National Organisation of the Unemployed claimed the numbers masked the high levels of emigration and the limited period people were able to sign on.
The Irish Small and Medium Enterprises Association (Isme) claimed the “dysfunctional and over generous social welfare system” was acting as a disincentive for employees to work, and that employers were unable to match “the over-generous State handouts”.
Separate figures from the Central Statistics Office on “job churning”, suggested the number of positions created during 2011 outpaced the number of job losses for the first time since 2007.
The positive employment data coincided with figures suggesting the country’s services sector – which accounts for about 70 per cent of the economy – grew at its fastest rate in six years last month.
The latest Investec Purchasing Managers’ Index (PMI) of services sector activity rose to 61.6 in August from 57.6 the previous month.
This was the highest reading recorded since February 2007, and comfortably above the all-important 50 mark, which denotes an expansion in activity.
“The principal cause of rising activity in August was the spell of unusually good weather in Ireland and the consequent boost to the tourism sector,” said Investec’s chief economist Philip O’Sullivan.
Investec’s sub-index for new business recorded it fastest rate of growth since March 2007, with respondents citing “increased new business from both domestic and export markets”.
New export orders expanded for a 25th successive month while companies also increased their staffing levels on the back of “greater workloads”.
At the same time, euro zone businesses had their best month in over two years in August as orders increased for the first time since mid-2011.
Markit’s Eurozone Composite Purchasing Managers Index (PMI) rose to 51.5 last month from 50.5 in July.
It was the highest headline figure since June 2011, albeit revised down a tad from an initial flash reading of 51.7.
The forward-looking new orders index rose to 51.0, the first time above the 50 mark dividing growth and contraction since July 2011, which will come as welcome news to European Central Bank policymakers meeting this week.
In Britain, a rush of new business last month drove the fastest growth in the services sector for more than six years.
The Markit/CIPS UK services purchasing managers index (PMI) rose to 60.5 in August from 60.2 in July, its highest level since December 2006, holding well above the 50 growth threshold for the eighth consecutive month.
Growth in China’s services sector hit a five-month high in August, providing more evidence that the world’s second-largest economy may have avoided a sharp slowdown.
Too much sugar can wreak havoc on your cholesterol levels
I t is a well-known fact that the war is on against sugar. Many people don’t realize that sugar and other carbohydrate consumption can also contribute to cholesterol problems.
In fact, sugar — in the form of table sugar (sucrose) or high-fructose corn syrup, ? can be a greater contributor to heart disease than the consumption of saturated fat, long regarded as the main contributor to this condition. Most Americans consume far too much sugar on a daily basis.Why? There are a multitude of reasons.
For example, many of us are unaware that processed foods are loaded with hidden sugars to enhance flavor. In addition to all the fructose added,Americans consume an average of 22 teaspoons of sugar a day and even more from carbohydrates (which the body breaks down into sugar) from pasta, rice, bread, corn and potatoes.
For the last 30 years, our dietary focus has been to reduce fats in our diets.As a result, there has been an increase in carbohydrate consumption resulting in an epidemic of pre-diabetes and diabetes along with a new type of cholesterol problem.
Cholesterol reduction requires a one-on-one treatment regime
As a physician and lipidologist (a doctor specializing in cholesterol management), I work with people on an individual basis to help them lower their cholesterol based upon their unique lifestyle and personal healthcare needs. This is extremely important because “one size does not fit all” when it comes to managing cholesterol. Every patient’s blood work, medical history, age and overall health should be taken into account when determining the best treatments for lowering cardiovascular disease.
Sugar consumption negatively affects “good and bad” cholesterol
Standard cholesterol measurement reveals your total cholesterol level broken down by LDL (bad cholesterol), HDL (good cholesterol) and triglycerides. LDL elevation, which is linked in part to saturated fat intake, is only one type of cholesterol problem. How is sugar a major culprit in cholesterol problems? Eating sugar and other carbohydrates raises triglycerides and lowers HDL. It also causes dysfunctional alterations in LDL molecules. LDL levels may seem normal, but this dysfunctional LDL can cause rapid clogging of arteries and increased risk for thrombosis.
Reducing sugar intake offers big rewards
Generally speaking, the goal for many people is to reduce daily sugar intake and realize that carbohydrates must also be reduced to impact your cholesterol problems.Avoid high fructose corn syrup.The brain cannot sense this form of sugar like it does regular table sugar and this will cause you to eat more before feeling full.After about five days of living on fewer carbohydrates, my patients report feeling much more energy, less stress and even craving healthier food choices.
So give your body a gift that will keep on giving. Dump the sugar and reduce the carbs.Your cholesterol, heart, mind and body will thank you for it. CentraState Medical Center in Freehold offers an extensive roster of boardcertified physicians and medical specialists throughout the region.To find a family or internal medicine physician near you, call 866-CENTRA7 (866-236- 8727), or visit the Physician Finder at centrastate.com/physicians.
In addition, CentraState’s Star and Barry Tobias Health Awareness Center (HAC) offers more than 200 health education and lifestyle management programs to help patients achieve their health and wellness goals.A dedicated team of registered nurses, registered dietitians, lifestyle management experts and integrative therapy practitioners help participants to lose weight, get fit, eat healthy and lower disease risk. For more information about all of the programs offered at the HAC, call 732-308- 0570 or visit centrastate.com/healthprograms.
Pacific leaders lay down climate challenge at summit
(L to R) Secretary General of the Pacific Islands Forum Secretariat Tuiloma Neroni Slade, Cook Islands Prime Minister Henry Puna, Marshall Islands President Christopher Loeak and Tuvalu Prime Minister Enele Sopoaga are pictured above left.
Pacific leaders whose nations are threatened by climate change on Tuesday opened a regional summit in the Marshall Islands with a challenge to the rest of the world to take action.
Leaders of the 15-nation Pacific Islands Forum (PIF) arrived at the summit in the capital Majuro on a flotilla of outrigger canoes and were greeted by warriors in grass skirts performing traditional stick dances.
Cook Islands Prime Minister Henry Puna said the theme of this year’s meeting, “marshalling a Pacific response to the climate challenge”, reflected the concerns of a region where some nations face being inundated by rising seas.
He said the people of the Pacific felt abandoned by the rest of the world even though they were bearing the brunt of an environmental crisis they had not created.
“(It) speaks partly to the frustrations we all felt in the past of being overlooked, ignore and undervalued,” Puna said.
“Years of inaction on the part of those most capable of enacting effective mitigation actions have understandably left us absolutely disappointed and dissatisfied.”
The Pacific Islands Forum consists mostly of small islands states, along with resource-rich Papua New Guinea and regional powers Australia and New Zealand.
Some of the countries, including host the Marshall Islands, are made up of atolls that barely rise one metre (three feet) above sea level.
Marshall Islands President Christopher Loeak said climate change was already affecting his country, which is in the grip of severe drought and was hit by storm surges in June which washed away parts of Majuro’s sea wall, forcing its airport to temporarily close.
While there has been some discussion about potential relocation of “climate change refugees” in the face of the advancing seas, Loeak was defiant, saying his people will always remain in their homeland.
“To all Marshallese and all the people of the Pacific, my land is my home, my heritage and my identity in ways the English language cannot capture,” he said.
“This is my country and I will always stay here. If water comes, it comes.”
Loeak hopes to use the summit to revive stalled global efforts to tackle global warming.
He wants the PIF nations to agree on a “Majuro Declaration”, which involves adopting concrete measures on issues such as reducing emissions and adopting renewable energy.
The plan is to then present the declaration to UN Secretary General Ban Ki-moon at the General Assembly meeting in New York at the end of September and push the rest of the world to follow its example.
While climate change is the central theme of the four-day summit, a raft of other issues will be discussed by the island leaders and dialogue partners attending the event, including diplomats from the United States, China, the European Union, India and Russia.
These include sustainable development, increasing islanders’ control of the $4.0 billion a year Pacific tuna industry, and whether to re-admit Fiji, which was expelled in 2009 in the wake of a military coup.