Ireland

The launch of an Irish '"bad bank" to quarantine toxic debts of the banks could require loan write-offs which match or are more severe than the banks’ worst-case scenarios under proposals being devised for the Government, Finfacts Ireland reported. Economist Dr Peter Bacon has advised the Irish Government to establish a bad debt company to offload the problem loans off the banks’ balance sheets to free up lending.

Housing markets across Europe suffered steep declines in both prices and activity during 2008 and the situation isn't likely to improve much in 2009, according to an annual report published Thursday by the U.K.-based Royal Institution of Chartered Surveyors. A continued lack of mortgage-credit availability will keep European housing markets in the doldrums, the survey said. The report shows that while U.K.

The European Central Bank is struggling to keep up with the region’s plunging economy, Bloomberg reported. Even as President Jean-Claude Trichet and his colleagues prepare to cut interest rates to a record low today, the 16 nations that share the euro are mired in a recession deeper than envisioned in their worst-case scenario just three months ago. The pain is building as companies including chemical-maker BASF SE cut investment and jobs, Spain and Ireland run an increasing risk of default and trade partners to the east crumble.

Beleaguered US insurance giant American International Group (AIG) has begun to lay off staff at a number of its Irish divisions as part of a restructuring, the Irish Independent reported. And some of the businesses will be rebranded as American International Underwriters--the company which manages a number of AIG’s overseas units. Staff were informed of the restructuring plan yesterday and were told it could be completed within six weeks.

Ireland's largest bank, Allied Irish Banks PLC, reported a 61% drop in 2008 net profit as its written-off debts soared amid crumbling property markets in Ireland and the U.K. Allied Irish--which has subsidiaries or stakes in banks in 12 further countries, including the U.K., the U.S., and Poland--said its 2008 net profit fell to €767 million ($972 million) from €1.95 billion in 2007. The Dublin-based bank said €15.5 billion of its loans, or 12% of its total book, faced a risk of future payment failures, with 80% of that in Ireland.

A New York private-equity group, KPS Capital Partners LP, agreed to buy the Irish and U.K. operations of Waterford Wedgwood PLC, the historic ceramics-and-crystal maker that was placed in a form of bankruptcy in January, The Wall Street Journal reported. The deal was announced by accounting firm Deloitte LLP, which has been trying to sell the company since it was placed in administration Jan. 5 after years of heavy losses under its former chairman and major shareholder, Irish businessman Sir Anthony O'Reilly.

Irish police and fraud investigators raided the central Dublin offices of Anglo Irish Bank Corp. Tuesday, signaling an intensifying inquiry into the now-nationalized bank and more woes for Ireland's financial sector, The Wall Street Journal reported. Shares in Irish banks fell sharply Tuesday after about two dozen officials, including officers from the Irish police force's fraud bureau, entered the bank's offices at about 10 a.m. local time to search for computers and documents.

Fears are growing that Ireland could default on its national debt after the cost to insure against possible losses on loans to the country rose to record highs at the end of last week, The Guardian reported. Credit ratings agency Moody's recently followed rival Standard & Poor's in warning it might downgrade Irish debt, amid fears that one of Europe's former success stories is falling into a deepening recession.

Ireland’s Ulster Bank has today launched what it terms "a new initiative designed to help potential home buyers onto the property ladder”, Finfacts.com reported. The Ulster Bank Secure Step Mortgage gives customers access to the local housing market with a five-year protection against falling house prices. The Secure Step Mortgage is being launched in conjunction with residential property developers from across Ireland and is available to first-time buyers and customers trading up.

U.S. private-equity firm KPS Capital Partners LP has signed a letter of intent to acquire certain assets of Waterford Wedgwood PLC, the historic crystal and ceramic maker that filed for insolvency this week, the group's administrators, Deloitte LLP, said Thursday. Deloitte said it was continuing to talk to other potential buyers as well, The Wall Street Journal reported. Deloitte and KPS officials said they couldn't comment on the size of the potential deal.