Ireland

A Russian lender that provided banking services to a subsidiary of State-controlled Irish Bank Resolution Corporation has been shut down by regulators there due to its “highly-risky credit policy”, the Irish Times reported. Until earlier this week, the website of the IBRC’s Moscow subsidiary, LLC Solids, listed Sovereign Bank as its “partner bank” in Russia. However, in April 2016 the bank had its licence revoked by the Russian Central Bank due to “the real threat to the interests of creditors and depositors”.

Irish banks are set to face mounting pressure from regulators to write off bad loans, a person familiar with the matter said. European authorities that now oversee the biggest Irish lenders have consistently pushed bankers to deal with the legacy of non-performing assets left over from the nation’s financial crash through measures such as loan sales, Bloomberg News reported.

Ireland’s central bank has increased its economic growth forecasts by almost a third, as growing strength in the rest of the eurozone helps to offset its expectations of a negative impact from Brexit, the Financial Times reported. In a quarterly update released on Friday, the Central Bank of Ireland said it now expects gross domestic product to increase by 4.5 per cent this year, compared to previous estimates of 3.5 per cent. Growth is expected to slow to 3.6 per cent in 2018, but that is still better than its earlier prediction of 3.2 per cent growth.

Permanent TSB shares plunged as much as 16 per cent on Wednesday as investors worried about the bank’s plan to resort to loan sales and repossessions to resolve its worst €2.68 billion of mortgages, which will also delay a return to dividends. The 75 per cent State-owned lender reported that its net profit shrank 55 per cent to €36 million in the first half from the year-earlier period, as it took a €6 million charge against bad loans, the Irish Times reported.

The Irish economy is about a third smaller than expected. The country’s current account surplus is actually a deficit, the Financial Times reported. And its debt level is at least a quarter higher than taxpayers have been led to believe. These are some of the startling results thrown up by a new measure of Irish economic activity adopted by Ireland’s official statisticians. The measure, known as “modified gross national income” and presented as GNI*, is an attempt to de-globalise one of the world’s most open economies.

What was that about the end of “deflationary forces” in the eurozone? While the rest of the eurozone shows tentative signs of a self-sustaining increase in prices, Ireland’s economy returned to deflation in June, and economists at the local central bank are blaming the country’s reliance on trade with the UK, the Financial Times reported. While a weak pound has led to uncomfortably high inflation in the UK, its post-Brexit referendum depreciation has created the opposite problem in Ireland.

How indebted is Ireland? After a sobering Monday briefing from the country’s National Treasury Management Agency, let us count the ways. The country’s general government debt is €200bn — four times the level it was in 2007, before the crisis hit and the country’s banking sector collapsed, the NTMA said at the launch of its 2016 annual report and half-yearly update. That equates to €42,000 per person, compared to an average of just €24,000 among the EU’s 28 member states, the Financial Times reported.

Irish airline Ryanair is ready to deploy up to 30 planes in Italy to replace capacity lost if Alitalia collapses or is restructured but does not want to buy the struggling Italian carrier, Chief Executive Michael O'Leary said on Tuesday. Ryanair's view mirrors the stance of rival easyJet and British Airways owner International Airlines Group(IAG), which have both said they are interested in replacing Alitalia capacity but say they do not want to buy the airline.

Ireland’s central bank has become the latest regulator to call for greater scrutiny of how the $4tn exchange traded fund industry works and whether existing guidelines are adequate in light of the industry’s astronomical growth, the Financial Times reported. The Central Bank of Ireland, which oversees financial regulation, wants greater clarification on issues such as ownership and pricing, according to a discussion paper that flagged potential pitfalls in the way the instruments operate.

Ireland is home to the world’s fourth-largest “shadow banking” industry, with $2.2 trillion of nonbanking financial assets based in funds, special-purpose vehicles and other little-understood entities in Dublin’s IFSC, according to a report published on Tuesday, the Irish Times reported. The figure equates to almost eight times the size of the Irish economy, as measured by gross domestic product.