Ireland

Much of Ireland has been riveted this summer by recordings of phone conversations from 2008 that revealed not only shocking levels of greed and bad breeding among some of the country’s top bankers, but a deliberate effort to snooker the government into bailing out the country’s banks by concealing the extent of their insolvency, The Washington Post reported.

AIB is putting together a panel of receivers and insolvency experts to move in on heavily indebted small and medium-sized enterprises (SMEs) and other commercial businesses with assets of value, the Independent reported. The bank is seeking tenders from insolvency experts who will take on the work on a fixed-fee basis. Much of the focus of the new drive will be on loans being managed by AIB on behalf of the State 'bad bank', Nama.

Ratings agency expects Irish banks to ramp up the rate of repossessions of buy-to-let properties for those in arrears with their mortgages and, as a result, doesn’t expect some of our biggest banks to return to profitability until 2015, the Irish Times reported. These were key observations from a largely positive commentary issued by S&P yesterday as a supplementary analysis to a research update on the outlook for Ireland that it published last month.

KBC Bank Ireland recorded a €69 million loss after tax and charges for impaired loans for the three months to the end of June, the Irish Times reported. This was down from €96 million in same period last year. The Belgian lender said Irish loan impairments for the second quarter fell to €88 million from €99 million the previous quarter, and €136 million in the corresponding period last year. KBC said, however, it continues to see a “mild increase” in arrears.

Ratings agency Fitch has downgraded the ratings on six tranches of Irish residential mortgage-backed securities (RMBS), saying the absence of a credible threat of repossession helped drive up mortgage arrears, the Irish Times reported. “Arrears levels across the majority of transactions continue to worsen,” the agency said.

Irish government debt is still vulnerable to a Greek-style restructuring, Capital Economics said in a note, the Irish Times reported. The country still hasn’t fully regained the competitiveness lost inside the euro region and remains vulnerable to swings in the global economy, Jonathan Loynes, chief European economist at Capital Economics, said. Debt levels, the housing market and a fragile banking sector may also hamper economic growth, Loynes said.

Bank of Ireland (BOI) is working on a strategy to avoid accruing an additional €445 million “step-up” payment to the Government, if it fails to pay back the State’s €1.78 billion holding of high-interest preference shares by next spring, the Irish Times reported. The issue is seen as a top priority within the bank, which yesterday reported its results for the first half of the year.

Seán Dunne’s adjudication as a bankrupt in Ireland marks the culmination in a five-month legal effort by one of his biggest lenders, Ulster Bank. The court’s ruling makes Dunne unique among the many former high-flying players of the boom-time property market – he is now bankrupt in two countries: Ireland, where he racked up debts of more than €700 million, and the United States, where he has lived for three years and is trying to start anew, the Irish Times reported.

Business group Ibec has reiterated its call on the Government to drop its plans to increase taxes by €500 million in October’s budget despite warnings to the contrary from Europe, the Irish Times reported. The call, in a report released by the organisation today, comes in the wake of a warning from European Stability Mechanism (ESM) managing director Klaus Regling that the Government must stick to its plans for a package of spending cuts and tax increases totalling €3.1 billion.

Ireland's Electricity Supply Board's unions are threatening to strike and are refusing to co-operate with further cost-cutting measures at the State-owned energy group as the row over the €1.7 billion pension shortfall continues, the Irish Times reported. The ESB group of unions claims the company is refusing to recognise the pension pot’s shortfall, which would leave current staff with just 4 per cent of their benefits should the plan be wound up.