Loan losses at the banks may be “a little larger” than was expected under the new regulator’s first round of stress tests last year, governor of the Central Bank, Patrick Honohan, has said, the Irish Times reported. The Central Bank will complete the second round of capital stress tests on the banks by the end of March. The liquidity of the banks will also be tested in this round. To ensure the banks are fully protected against further shocks, Prof Honohan has insisted they “overcapitalise” above a new core tier one capital ratio of 12 per cent.

Allied Irish Banks has made a gain of €1.4 billion from a voluntary offer to buy back debt for 30 cent in the euro from subordinated bondholders. This will go towards the €6.1 billion in capital that it must raise before the end of next month, the Irish Times reported. The bank is purchasing about €2 billion of the bonds, paying a 70 per cent discount in an offer that was taken up by about 45 per cent of subordinated bondholders – a lower rate than expected.

A building firm that was rescued from examinership three years ago has been put into receivership by the National Asset Management Agency (Nama) and Ulster Bank, The Post.ie reported. McEnaney Construction, which is controlled by developer John McCann, has debts of almost €75 million. Nama has taken over the company’s debts to Irish Nationwide and made a joint move with Ulster Bank to appoint Tom Kavanagh of Kavanagh Fennell as receiver in recent days. The Co Louth building firm announced plans in 2006 to build the M1 Euro Park, a €200 million development on a 90-acre site outside Dundalk.

Property investors have been granted a reprieve in the Finance Bill, with the restriction of section 23-type tax reliefs being postponed until at least 2012, the Irish Times reported. Landlords have been lobbying hard since the phased abolition of property-based legacy reliefs was unveiled in last December’s Budget. The proposal that section 23 tax relief would be ring-fenced for use against rental income from the property giving rise to that relief, as opposed to all Irish rental income as was previously the case, proved particularly controversial.

Music and books retailer HMV has appointed accountancy firm KPMG to advise on its debt and help it meet an April test of its borrowing rules, a source familiar with the situation said, the Irish Times reported. The source said today that KPMG, already an adviser to HMV, has been given the additional task of tackling the company's debt, reported as £152 million when it published half-year results in December. That is more than the company's market capitalisation of about £108 million.

The High Court has approved a survival plan for the Zumo chain of juice and smoothies bars, InsolvencyJournal.ie reported. Mediterranean Food and Wine Ltd, the company which operates Zumo, was granted court protection from its creditors last October because it had become insolvent and was unable to pay its debts. The firm is the largest fruit juice and smoothie bar chain in Europe and has a presence in 12 countries. At its peak, it operated 33 stores at home and abroad plus another seven under a franchise agreement.

David Drumm has reached agreement with lawyers for Anglo Irish Bank on a proposed protective order. If approved by a judge, it will enable him to keep elements of his bankruptcy proceedings secret, the Irish Times reported. The bankruptcy judge, Frank Bailey, will decide today whether the Drumms’ holiday home in Cape Cod can be sold in the interest of paying Mr Drumm’s debts.

House prices declined by 3.5 per cent in the final quarter of last year and are down 38 per cent since prices peaked at the end of 2006, according to the latest Permanent TSB/ESRI House Price Index, the Irish Times reported. While the rate of decline in average house prices in Ireland rose in the fourth quarter the rate of decline for the year as a whole was significantly less than what was seen in 2009. House prices fell by 10.8 per cent in 2010 compared to a drop of 18.5 per cent in 2009.

French President Nicolas Sarkozy has said Ireland cannot benefit from the EU’s financial aid while maintaining its low corporate tax rate, the Irish Times reported. Making the case for closer fiscal harmonisation between euro zone states, Mr Sarkozy said: “I deeply respect our Irish friends’ independence and we have done everything to help them. But they cannot continue to say ‘come and help us’ while keeping a tax on company profits that is half [that of other countries]…We cannot speak about economic integration without the convergence of fiscal systems . . .

A proposal to pay the holders of some €1.3 billion of Quinn Group debt a cash payment of up to €200 million, in lieu of guarantees over the assets of subsidiary companies of Quinn Insurance, was one of a series of recommendations put forward by the Quinn family in its discussions with Anglo Irish Bank on a possible joint takeover of the insurer, the Irish Times reported. The details of the Quinn family’s proposals for its proposed takeover of the company have emerged as the sale of Quinn Insurance reaches its final stages.