Monday 10th November 2014
IRELAND’S SMEs in recovery continue to find it difficult to get finance
Latest report from the Credit Review Office points to challenges facing distressed SMEs
Credit reviewer John Trethowan would like the Government to consider an expansion of the microfinance loans scheme limit to at least € 50,000, and possibly € 100,000.
Distressed small and medium sized companies which are now recovering and are potentially viable continue to find it difficult to obtain finance, according to the 14th report reviewing the accessibility of credit for small and medium sized enterprises (SMEs) and farms.
The report, from the Credit Review Office, points to two main challenges: the credit requirements of the real economy as growth returns; and the challenges posed in refinancing some businesses and farms as the banking market contracts.
To date, the Credit Review Office has received 520 formal applications, of which 361 have reached final conclusion. Of these, the office upheld 56% in favour of borrowers, resulting in €29.7m credit being made available to SMEs and farms, helping to protect /create 2,091 jobs.
Credit reviewer John Trethowan did add a caveat to these figures however, noting that since the upper limit was raised to €3m, and with the weakened state of many businesses seeking new credit to grow, it has meant that reporting outcomes of the credit reviews are becoming less black and white.
“This has led me to caveat the upheld appeals number, as some lending is now being agreed on the basis of an interim amount to meet short term needs, with performance milestones agreed for the business/farm whereby further funds will be made available on achievement of these measures,” he said..
Of the aforementioned recovering distressed SMEs, Mr Trethowan said that a trend is emerging of banks tentatively supporting these businesses by offering short term and restricted credit facilities against performance milestones which, if achieved, will allow more funding for longer periods to be advanced. “Such an approach to challenged businesses is prudent and understandable,” he said, but noted that this makes the reporting outcomes of the credit reviews more difficult.
Mr Trethowan welcomed new entrants into the debtor finance market, “anything that enhances supply is helpful”, noting that debtor finance is “helpful for businesses that are recovering”.
However he did bemoan the lack of banks now lending to the SME and farm sector, noting “we couldn’t have afforded to lose Ulster Bank out of the market”.
Mr Trethowan also referred to comments by Bank of Ireland CEO Richie Boucher back in May, when Mr Boucher questioned the quality of some of the decisions made by the office in relation to BOI. Noting that the office was “surprised” by these comments, Mr Trethowan said that that they merit some further investigation by the office.
Of the current microfinance loans scheme limit, Mr Trethowan suggested that the Government should consider an expansion of the microfinance loans scheme limit to at least € 50,000, and possibly € 100,000.
“An increase in the limit will likely also need the term to be extended beyond the current three-five years to ensure that repayment levels are affordable,” he said.
Responding to the publication of the report, Patricia Callan, director of the Small Firms Association, said that it is essential that a wide variety of debt financing options is available, and that the new Strategic Banking Corporation of Ireland (SCBI) loan fund should be used “to attract new financial intermediaries into the market to provide lower cost, new and innovative products, such as longer term loans and interest free holidays, which will meet a market need.”
EVIDENCE SHOWS THAT A MUCH LARGER BURIAL SITE EXISTS AT TUAM MOTHER AND BABY HOME
The burial site at the Tuam Mother and Baby Home in Co Galway may have been much bigger than previously thought.
More than 700 children died at the home between 1925 and 1961.
Evidence uncovered by local historian Catherine Corless (ABOVE RIGHT), and presented to the Children’s Minister James Reilly, points to a far more extensive burial site.
She is due to speak on the issue at a conference at NUI Galway this evening.
Meanwhile, the draft terms of reference for the Commission of Inquiry into the matter has been circulated to all of the relevant departments.
Minister Reilly has told Tipp FM that witnesses will be compelled to appear before the inquiry – which is being chaired by Justice Yvonne Murphy.
He said: “The issue of additional burial areas has been raised with me and the commission will look into all of this.
“I would like to assure people that this commission is set up under the Commissions Act and therefore Judge Yvonne Murphy and the commission will have the power to compel witnesses.”
Joan Burton wins ‘Woman of Year’ gong
Joan Burton and Joanne O’Riordan
Tánaiste Joan Burton was named ‘Woman of the Year 2014’ at a ceremony in Dublin last night, with Philomena Lee and Panti also honoured.
The Labour Party leader picked up the top trophy at the Irish Tatler Women of the Year Awards in recognition of her political achievements.
The ceremony, hosted by businesswoman and Irish Tatler publisher Norah Casey, was held at the Four Seasons in Dublin and saw 15 awards handed out to “some of Ireland’s most renowned leading business, media and entertainment women”.
Philomena Lee – whose life story was made into a film starring Judi Dench – was recognised with the Irish Tatler Woman of the Year Special Achievement Award, “for her bravery during her 50-year long search for her forcefully adopted son.
Philomena Lee is shocked to be named as winner
Panti received the Irish Tatler Woman of the Year Special Contribution Award for the passionate speech she gave in the Abbey Theatre in February of this year in response to controversial comments made on RTÉ.
Also honoured was Cork student Joanne O’Riordan, who received a Special Recognition award for her exceptional role as an advocate for the rights of the disabled.
“Now into its 14th year, these awards continue to excel in celebrating women who reach the heights of inspiration,” said Casey.
“Last year was all about marking ‘firsts’, and today our 2014 winners continue to lead in exceeding the boundaries of expectation, both in their careers and in society.”
Irish Tatler Women of the Year Awards winners:
Business – Caroline Keeling
Entrepreneur – Leonora O’Brien
Sport – Briege Corkery
Media – Ann O’Dea
Film & Drama – Deirdre O’Kane
Arts & Literature Siobhán Parkinson
Fashion – Helen Steele
Public Life – Emily Logan
Music Faye O’Rourke
Entertainment Maia Dunphy
Hall of Fame – Myrtle Allen
Special Recognition – Joanne O’Riordan
Special Achievement – Philomena Lee
Special Contribution – Miss Panti
Overall Winner – Joan Burton
Ireland the first with UPC to ban access to child sex abuse on websites
Users who access child abuse material either mistakenly or deliberately will have their internet access restricted.
THE INTERNET SERVICE PROVIDER UPC is to restrict access to websites containing child sex abuse material, becoming the first broadband company to do so in Ireland.
Under an agreement between UPC and An Garda Síochana, UPC will restrict access to domains or URLs containing child abuse material based on a list provided by the gardaí.
If a user access child sexual abuse material, either deliberately or mistakenly, their internet access will be restricted and an advisor message will be displayed explaining the reasons why.
Similar restrictions already exist in the UK, Australia, Norway, Sweden, Denmark and Switzerland, among other countries.
List of websites
The list of websites that are restricted by UPC are drawn up by the gardaí, with the interim Garda Commissioner Noirin O’Sullivan stating that today the number of international websites restricted are in the double digits.
She stated that the number on the list fluctuates and it is going to be constantly updated.
O’Sullivan said discussions are ongoing with other Irish internet service providers. She added that it is just one tool the gardaí are using to tackle this crime.
The Commissioner said today’s initiative is to act as deterrent to those accessing images of child sexual abuse, adding that it took several months for this initiative to be negotiated with UPC.
Minister for Justice Frances Fitzgerald described it as a ‘notable achievement’ and congratulated both the gardaí and UPC on the development.
“The close cooperation with law enforcement which was launched today will reduce the amount of child abuse material which will be available on the internet in Ireland,” the Minister said.
She called it a “heinous crime” and said it was important to have international cooperation between internet providers, which she said is extremely important in tackling this crime.
“It will also reinforce the message that the viewing or possession of, or indeed the trading in child abuse material, is simply not acceptable”.
Minister Fitzgerald said she hoped that other companies would follow suit.
She added that research suggests that “inadvertent viewing may precipitate some people to pursue further such illegal material to their long term detriment and to the detriment of society as a whole”.
The minister added that Government are strengthening legislation in this area under the new sexual offences legislation that will be introduced before the end of this Dáil term.
Magnus Ternsjö, CEO of UPC said if someone tries to access websites where child sex abuse material is available a notice will appear on screen stating that the site has been restricted and the advisory message will outline the reasons why. However, he said it does not provide for any transfer of user data to the authorities.
“UPC adheres fully to the data protection legislation and does not make any data available to any external parties accept where required to do so by law,” he said, adding, that the identity of a person is not stored when the blocking notice appears.
Minister for Justice and Equality Frances Fitzgerald TD, Garda Commissioner Noirin O Sullivan and CEO of UPC Magnus Ternsjo at the announcemnet that UPC is to immediatley restrict access to domain names containing child sexual abuse material.
“We never control what our customers are watching” as UPC honour the privacy of their customers “in the extreme” said Ternsjö.
He added that it would be wrong for UPC to start acting as law enforcement agency or government stating that they are following the laws.
O’Sullivan said there are occasions where as part of a criminal investigation the gardaí can seek evidence from any service provider for data and there is legislation already in place enabling gardaí to access it.
AIB bank profitable in third quarter of this year
AIB, the State-owned Irish bank, released an Interim Management Statement Monday with margins and net write-backs the standout factors.
Lending drawdowns year to date (YTD) increased by c. 40% year on year with the bank saying its positioned for sustainable growth; impaired loan volumes reduced by c. €4.6bn (c.16%) YTD to c.€24.3b and the number of accounts in arrears in the Irish residential mortgage portfolio down c.11% YTD.
Eamonn Hughes of Goodbodycommented – – “The net interest margin was 1.64% year to date, which implies a figure of 1.70%+ in Q3 after the H1 average of 1.60% (1.63% in Q2). Our 1.63% full year estimate is likely to move to 1.67% and our 1.80% FY15 estimate is also likely to move up 4-5bps. Lower funding costs are a key driver and new lending drawdowns are up 40% yoy (approvals of €9bn, up 39% yoy and +€3.4bn in the quarter, up from €5.6bn in H1). Net loans of €64.7bn were unchanged from June, though modestly helped by sterling. Deposits were €66bn, down from €67bn in June (LDR 98%). Funding from monetary authorities was just €2.4bn at period end (with €1.9bn of TLTRO). Elsewhere, non-interest income (helped by some additional AFS disposals) and costs look in line with our expectations.
On asset quality, impaired loans were €24.3bn, down €1.7bn in Q3, a slightly faster run rate than the €2.9bn decline in H1. Impaired loan balances were stable or lower in all loan sectors relative to June. Specific provision coverage is down from 55% to 53%. The bank is now set to record an overall net write-back of provisions in the year to date after the €92m charge in H1 given the outcome to date of its restructuring, whilst the underlying charge continues to trend to normal levels. The core tier 1 capital ratio was up 40bps in the quarter to 16.5%.
This is a positive trading update from AIB, with the margin progression the highlight and net write-backs year to date. Whilst the better margin figure is likely to add about €40m to our net interest income estimate, we are likely to materially upgrade our current €691m net income forecast given a likely net write-back in the year compared with our current €210m charge.”
Stephen Lyons of Davy commented – – “Top-line recovery ongoing, but loan book shrinkage continues: The bank’s net interest margin (NIM) excluding guarantee charges increased to 1.64% from 1.60% at the interim stage. Non-interest income continues to benefit from disposal income, including AFS gains. Operating costs continue to decline, and the group expects to meet its €350m operating costs target for 2014 relative to 2012 levels (excluding €60.5m bank levy).
Despite these positive income drivers, the loan book continues to shrink (ex-FX) although total approvals of €9bn year-to-date are c.39% higher year-on-year (yoy) and total drawdowns of €4bn are up 40% yoy. The bank’s surplus capacity to support lending is emphasised by a loans-to-deposits ratio of 98% and monetary borrowing of €2.4bn (€1.9bn TLTRO) now at more normalised levels.
Loans restructuring success boosts capital position: Total impaired loans reduced by €1.7bn in the quarter to €24.3bn, and are now down €4.6bn year-to-date. This has been driven by restructuring success, at a positive variance to loan loss provisions and a reduced flow of newly impaired loans. This success has resulted in an overall net provisions write-back year-to-date, which compares with a charge of €92m at the interim stage. The statement does not note any further impact to provisions models from an adjustment to house price assumptions, but the specific provision coverage ratio reduced by 3ppts in the quarter to 52%. In total, the provisions write-back in the quarter and pre-provision profitability resulted in an increase in CET1 capital to 16.5% (transitional basis) from 16.1%, despite a marginal increase in RWA.
No update on capital reorganisation, though LT2 issue should be next step to rebuild a market following in our view: The statement notes that considerations in relation to the €3.5bn of preference shares and the €1.6bn of CoCos are expected to continue. also that these considerations will reflect the evolving regulatory requirements and the improving operating performance of the bank. Uncertainties regarding the introduction of the SSM, Irish banks’ required capital stacks in the new capital landscape and the format of possible AT1 instruments are all obstacles to any significant near-term reorganisation. However, we remain of the view that market re-engagement, first through a LT2 capital issue, is necessary to rebuild a following and demonstrate the transformational change underway at the bank.”
Governments now agree on new protection principals for polar bears
Convention on Migratory Species meeting in Ecuador adds listings for Cuvier’s beaked-whale, and 21 shark, ray and sawfish
Polar bears are among 31 species approved for greater protections by more than 100 countries, in a move hailed by conservationists as an important step to saving the endangered mammal.
The Convention on Migratory Species conference in Ecuador closed on Sunday, with new listings for a whale capable of the world’s deepest ocean dives, and 21 shark, ray and sawfish. A proposal to list the African lion, however, was rejected due to a lack of data.
The Norwegian proposal to protect the estimated 20,000-25,000 remaining polar bears, which are threatened by melting ice, Arctic oil exploration and hunting, saw the species gain an Appendix II listing. That means countries must work together to put in place conservation plans, as opposed to the stronger Appendix I listing which requires strict protections such as bans on killing an animal.
Dr Masha Vorontsova, director of the International Fund for Animal Welfare Russia, said: “We are pleased to see the polar bear joining a growing list of threatened migratory species protected under CMS. Appendix II does not mean that sufficient conservation action will be taken to protect the well-being of polar bears.
“What gives us hope is that this listing means that 120 countries are now recognising the threats that polar bears face from the shrinking of their ice habitat to pollution and hunting. This is an important first step, but it must not be the last if we wish to save the polar bear.”
The top level of protection, Appendix I, was issued for the rarely-seen Cuvier’s beaked-whale (Ziphius cavirostris), which scientists have recorded as diving as deep as 3 km. below the water’s surface.
Cuvier’s Beaked Whale (Ziphius cavirostris) adult underwater in deep inter-island waters near Baltra Island, Galapagos Islands, Ecuador.
The meeting in Quito also agreed that the 120 parties to the convention should pass laws to ban the capture of live whales and dolphins for use in travelling shows and entertainment.
Cathy Williamson of Whale and Dolphin Conservation said: “This very positive development from CMS sends a clear message of international concern about the impact of live captures for the aquarium industry on wild whale and dolphin populations.”
Campaigners praised the new protections for rays and sharks, with countries agreeing to take steps to stop the practice of finning, where sharks are caught and their fins cut off for use as soup at Chinese banquets.
Humane Society International’s Alexia Wellbelove said: “Today’s commitment at CMS by countries to provide greater protection for shark and ray species is an unprecedented step forwards in the conservation of sharks and rays worldwide.”
Governments agreed that the use of lead shot should be cut down to stop the poisoning of migrating birds, despite the UK initially opposing the move. The resolution also called for the phasing out of the veterinary drug diclofenac, and rodenticides, insecticides and poison baits.
Martin Harper, RSPB director of conservation, said: “I would like to congratulate the UK government for its role in helping to find a way forward. The UK showed leadership on the issue of poisoning by providing financial support to set up the CMS Preventing Poisoning Working Group, which produced the guidelines that have been ratified.”
A flock of herring gulls fly pass wind turbines on the west coast of Cumbria near Workington, Cumbria,
Guidelines were also settled for the first time on how best to protect birds and bats from wind turbines and other forms of renewable energy.
Bradnee Chambers, the convention’s executive secretary, said: “Like never before in the 35-year history of CMS, migratory animals have become the global flagships for many of the pressing issues of our time. From plastic pollution in our oceans, to the effects of climate change, to poaching and over-exploitation, the threats migratory animals face will eventually affect us all.”