0 comments on JP Morgan says strong Labour showing in vote could support sterling

JP Morgan says strong Labour showing in vote could support sterling

As polls in the UK tighten ahead of Thursday’s election and the possibility of a hung parliament looms, JP Morgan is suggesting a stronger Labour showing could, contrary to the prevailing market view, help support sterling.

The rationale being that a centre-left coalition of Labour, the Scottish Nationalists and the Liberal Democrats would push Britain towards a softer Brexit, a better scenario for the UK economy in the bank’s view.

JP Morgan strategists believe a Tory win, whatever the size, will see the country leave the single market and the customs’ union with negative consequences for UK trade.

“Brexit is still likely to feel rather hard insofar as it is liable to circumscribe the UK’s single market access, even if the change in the electoral timetable should temper the tail risk of an outright disorderly Brexit in 2019,” they said in a note last week.

The fact that one of the largest US investment banks has taken up a position at odds with the market is a testament to the level of unpredictability that currently stalks FX markets.

For Irish exporters, who have borne the brunt of the Brexit-related volatility in sterling, Thursday’s vote has the potential to provide some welcome relief or further erode their position.

Since the referendum last June, sterling’s value against the euro has ranged between 77p and 91p, damaging the competitiveness of Irish exports, denting UK tourist numbers, and eroding the profitability of companies that report in euro but generate revenue in the UK.

Currently at 87p, sterling remains roughly 2 per cent higher than when the election was called back in April, suggesting markets remain positioned for a big Conservative party win despite a tapering of support for Theresa May’s government in recent days, says Mark O’Brien, head of the FX desk at Investec.

“The thinking is that if she has a clear majority it gives her a firm hand to go and negotiate for Brexit without worrying about the left and right flanks of her party, never mind the opposition.”

The Conservatives currently have a working majority of 17 seats if the five Sinn Féin abstentions are included.


O’Brien believes that increasing this to 50-plus would constitute a success for the party and prompt a 2 per cent swing in favour of sterling, moving it back to around 85p, “providing some welcome relief for Irish exporters”.

On the government’s recent wobble in the polls, he cites two previous landslide election victories in the UK – Margaret Thatcher in 1983 and Tony Blair in 1997 – where support for the eventual winners appeared to soften in the final days before the vote.

He also believes modern polling techniques, particularly the use of online surveys which are weighted in favour of younger voters, may be underestimating the strength of the Tory vote.

Scenario two, according to O’Brien, is if the Tories win but with a slim majority, whereby May’s authority is undermined.“That would be a negative for sterling,” he says. The change is too difficult to predict without knowing just how weakened May might be by such a result.

He says scenario three is a hung parliament, which is likely to precipitate a sharp sell-off of sterling because of the uncertainty that would ensue. Nonetheless, there is a possible silver lining attached to this scenario.

“Perhaps a government will be formed that takes a softer tone to Brexit and that could lead to a strengthening in sterling in time,” he says, echoing the JP Morgan view.

The most unlikely scenario centres on a Labour victory, which O’Brien says would also prompt a major sell-off in sterling, at least initially, as the market takes a dim view of the party’s economic policies, particularly its plan for a rise in corporation tax.

“But again the possibility of a softer Brexit might see sterling strengthen in time, but the initial reaction would be a sterling sell-off,” O’Brien says.

Softer Brexit

“From an Irish perspective a Labour win and a softer approach to Brexit might be good, but in the short term for the Irish exporter a strong Conservative win would be better.”

There’s another factor that underpins the current euro/sterling dynamic and that’s the European Central Bank. Frankfurt holds its monthly meeting on the same day as the UK poll, and firmer indications about how fast it plans to conclude its quantitative easing (QE) programme is also likely to have a bearing on the euro/sterling exchange.

“You have essentially a double whammy for Irish exporters that are all coming to a head next Thursday,” O’Brien says. “The market is expecting the ECB to firm up its language around monetary policy and to allude to the tapering of its QE programme. If the language is stronger, you could have a strengthening of the euro against sterling.”

Combined with a surprise UK election result, this could heap further pain on exporters here.

However, O’Brien points to recent euro zone inflation figures which were weaker than expected, and a possible Italian election in autumn as grounds for the ECB to be less hawkish than the market wants.

Either way, Thursday promises to be busy day for analysts.


0 comments on Sales of own-brand products jump by 4% in Irish supermarkets

Sales of own-brand products jump by 4% in Irish supermarkets

Irish shoppers love affair with supermarkets’ own-brand products appears far from over with sales jumping by almost 4 per cent compared to this time last year.

All told, 54 per cent of the products found in the average Irish supermarket shopper’s trolly carry own-brand labels compared with less than 10 per cent before the economic crash a a decade ago, according to the latest figures from retail analysts Kantar Worldpanel.

The data also shows Tesco leapfrogging Dunnes Stores to reclaim second place in the Irish supermarket sweeps for the first time since last September, with a lead of 0.1 per cent.

Kantar Worldpanel’s latest grocery market share figures covering the 12 weeks to May 21st still have SuperValu in the top spot with a total market share of 22.5 per cent, a full half a percentage point ahead of Tesco.

Dunnes is in third place on 21.9 per cent while Lidl has retained its fourth position with a share of 11.4 per cent, just 0.2 per cent ahead of its main rival Aldi.

According to the Kantar figurers, the grocery market continues to grow despite continued price deflation with an increase of 2.2 per cent recorded during the past quarter compared with last year

The sector was worth €2.37 billion over the 12-week period, an increase of €50 million on last year.

“With the average price per pack falling slightly, growth has been driven by households buying extra items, with the average shopping basket increasing in size,” said thedirector at Kantar Worldpanel David Berry.

“The recent strong performance from Dunnes Stores has continued, with overall sales improving by 4.9 per cent compared with last year,” Mr Berry said. “This is despite the number of consumers visiting Dunnes actually falling. “

The retailer had 54,000 fewer shoppers during the past 12 weeks. However, the fall was offset by an impressive spending increase among remaining customers, with Dunnes shoppers spending 10 per cent more – €47 extra on average – with the grocer during the latest quarter.

Lidl and Aldi have also enjoyed strong performances during the past 12 weeks. Growth for Lidl has accelerated to 2.7 per cent with Aldi boosting sales by 4 per cent.


0 comments on Cork-based Thalman Health seeks $2m to fund wearable tech

Cork-based Thalman Health seeks $2m to fund wearable tech

Thalman Health, which has developed a system for remotely monitoring at-risk patients, is seeking to raise $2 million in new funding to bring its wearable solution to market.

The Cork-based start-up is the brainchild of 26-year-old James Foody, from Enniscrone in Sligo.

Mr Foody was named Ireland’s best young entrepreneur in 2015. In addition, Ayda, a former incarnation of Thalman, that designed a wearable fertility tracker, was previously named as the country’s best start-up.

Thalman raised $550,000 in seed funding in June 2015 from investors that included Enterprise Ireland.

“We are actively talking to investors and expect the new funding round to close within the next two months,” said Mr Foody, who is based in San Francisco.

“The new funding round is very much geared towards getting FDA approval for the solution and bringing it to market,” he added. The start-up, whose backers include PCH founder and chief executive Liam Casey, is focused on reducing infection-related morbidity, mortality and re-admission in outpatients undergoing treatment for cancer.

“Fever is the cornerstone of infection management globally which is why nurses walk around taking patients temperature so frequently. However, if you’re in a situation where you’re only checking manual readings every four to six hours then you’re not necessarily going to spot patterns, you end up reacting when people are already very ill,” said Mr Foody.

Change the paradigm

“We’re trying to change that paradigm by coming up with a device that is effectively an alternative to thermometers. It continually monitors the core body temperature and identifies early signs of infection so as to provide a much bigger window for early intervention for those most at-risk, such as oncology patients or the elderly,” he added.

Speaking on the fringes of the EY Ireland Entrepreneur of the Year chief executives’ retreat, Mr Foody said the company recently rebranded from Ayda to Thalman Health as it decided to switch focus from the consumer space to the healthcare sector.

“We’re using the same core technology as initially developed but we realised we could have a bigger impact in the healthcare sector and yet still license or partner the solution for the consumer space,” said Mr Foody.

Thalman has now completed pre-clinical tests on the system but has yet to be approved by the US Food and Drug Administration.

“The product is at a very mature stage and we are working with our clinical partners here to compile more data to work towards approval, which shouldn’t take too long because unlike a drug or surgery tool, our solution is non-invasive. We’re hoping it will be on the market this time next year,” said Mr Foody.

“The cost to make the product is low so it should be reasonably priced,” he added.


0 comments on Flow of new jobs remains constant despite Brexit

Flow of new jobs remains constant despite Brexit

Brexit or no Brexit, the flow of new jobs into Ireland remains constant.

IDA Ireland closed out an incredibly successful week, announcing investments of more than €300 million and about 620 additional jobs.

The IDA’s investments include biopharmaceutical company MSD, which announced that it will create 330 new jobs and invest €280 million over the next three years at manufacturing sites in Carlow and Cork, and Takeda Pharmaceutical Company Ltd announcing that construction will begin on a new €40 million production facility at Grange Castle, creating 40 jobs.

To those IDA numbers you can add 250 new roles that Grant Thornton plans to add to its operation in Ireland, largely based around a centre of excellence for global compliance reporting.

It’s a continuation of a trend over the past six years that has seen the unemployment rate decline from just more than 15 per cent to 6.4 per cent in May.

IDA chief executive Martin Shanahan, who is currently in India meeting with clients, described it as “hugely encouraging” in spite of the global economic headwinds.

Unfavourable oil trends

He was also buoyed by Ireland’s ranking in sixth position in the IMD Global Competitiveness Yearbook rankings although he acknowledged that the country could not be complacent, as highlighted by the National Competitive Council this week.

On Thursday, the council’s chairman, Peter Clinch, said the unfavourable oil and currency trends provided “a timely warning” about the vulnerability of Irish firms to external international shocks. “This reinforces the importance of prioritising policies and actions that are within Ireland’s control to enhance cost competitiveness,” he said.

Infrastructure bottlenecks, skills shortages and industrial unrest were among the domestic “pressures” listed.

There was also some better news on the income tax front, with figures for May broadly in line with expectations having trended earlier in the year below profile for no apparent reason.

All in all, a positive backdrop for whoever succeeds Michael Noonan as Minister for Finance later this month.


0 comments on Nama convinced Noonan to adopt vacant site levy

Nama convinced Noonan to adopt vacant site levy

The Government’s confirmation of its plan to levy investors who are sitting on vacant development sites from January 2019 could be a parting shot of sorts for outgoing Minister for Finance, Michael Noonan.

The idea is simple, the Government wants to levy anyone sitting on vacant land that could be used for housing. It aims to incentivise such owners to sell the property for development rather than hoarding it to earn a bigger profit down the road as prices increase on the back of the housing shortage.

Various politicians and interest groups have called for precisely such a levy. However, the organisation that appears to have convinced the Government to do this is Nama. Its chief executive, Brendan McDonagh, argues that there is evidence to show that some landowners are happy to sit on assets.

Nama and its debtors sold land capable of holding 50,000 new houses over the last six years, but the purchasers built, or began building, just 3,220, a mere 6 per cent of what could be produced. McDonagh regards this as a poor return, even allowing for the fact that the new owners could not have started all 50,000 houses as soon as they acquired the sites.

He says that vacant sites’ values increase more rapidly than house prices. If a house’s worth rises to €450,000 from €300,000, the Nama chief executive points out that a site can grow to €180,000 from €50,000. This creates a fair incentive for someone to do nothing other than sit and watch their investment swell.

Developers, including Michael O’Flynn and Cairn Homes’ Michael Stanley, say the Nama viewpoint is simplistic and that homebuilders have no interest in hoarding land. The problem, they say, is access to finance to develop such sites.

As ever with levies, the issue is the rate at which it is applied. Too low a rate could be soaked up by landowners; too high and the Government’s lawyers have warned that it could risk compromising landowners’ constitutional property rights.

“So there is a balance to be struck,” Noonan says. Both side know the rate applied will be 3 per cent. The problem for Government is that in the midst of a housing crisis, landowners will not feel the squeeze for at least another 18 months.


0 comments on Ireland at the heart of football tax probes

Ireland at the heart of football tax probes

During the Champions League final tonight, expect Cristiano Ronaldo to rip off his jersey at some point to flex his muscles. It’s the same drill: the ball goes in the net, the Real Madrid star goes topless and his sponsors go weak at the knees.

It is all part of the preening Portuguese’s carefully-honed image as the personification of power, speed and success. This image drives his wealth, as businesses pay to have their products associated with his name and face.

Ronaldo’s vast earnings from his image rights, however, are also currently the subject of an investigation by Spanish tax authorities that led directly to an office in Dublin’s north inner city.

His image rights have for years been handled by two Irish companies, Multisports Image and Management (MIM) and Polaris Sports. Both are registered to the office of the tax firm Moore Stephens accountants.

Tax officials could seek up to €15 million from Ronaldo in back taxes on €75 million of payments that moved through Ireland between 2011 and 2014. Officials have until the end of this month to decide whether to prosecute.

Ronaldo has strenuously denied wrongdoing. He is also far from the only football star to have his collar felt by European tax authorities over image rights.

As revealed by Football Leaks, the website that obtained more than 18 million hacked documents on the sport’s finances, there is often an Irish connection.

Jose Mourinho, the Manchester United manager and former Real Madrid boss, had his financial affairs investigated in Spain, including links to MIM and Polaris. Authorities recently also discussed a prosecution for Real Madrid left-back Fabio Coentrao over €1.4 million of payments through Dublin.

Manchester United’s Jose Mourinho, who had his financial affairs investigated in Spain, and Paul Pogba, whose image rights resided for a time in Clonakilty. Photograph: Soren Andersson/AFP/Getty Images

Monaco player Radamel Falcao, a God to Colombian football fans, has also been investigated for his use of Irish companies in tax-efficient image rights structures. He could face a €5.5 million bill.

There has been scrutiny, too, of Ricardo Carvalho, whom Mourinho brought to Chelsea, and Angel Di Maria, whom he brought to Madrid. Di Maria’s home was reportedly searched last month by French officials probing image rights: the Agentinian now plays for Paris St Germain.

Paul Pogba’s image rights even resided for a time in Clonakilty, west Cork. The French man, who is not being probed by tax authorities, is unlikely to have developed a taste for black pudding.

So why do they all use Ireland?

A top UK-based sports lawyer explains that the biggest stars can earn more from image rights than from their club salaries.

“Wages are taxed at source in the countries in which they play, reducing the scope for tax savings,” he said.

Earnings from image rights, however, can be more easily diverted abroad by assigning the rights to a foreign company, which collects the cash from sponsors.

Many footballers assign their rights to tax havens: Ronaldo’s were owned by Tollin in the British Virgin Islands, while Mourinho’s went to another BVI outfit, Koper. Coentrao’s resided in Panama.

But many corporate sponsors are uneasy sending large payments to tax havens. It’s not a good corporate governance look. They need an acceptable intermediary, which is where Ireland comes in.

“The structures footballers use are not that different to the double-Irish tax structure in the corporate world,” said an unnamed financial adviser to sports stars.

Aggressive tactic

The tax haven entity will often license rights to a company in a developed, reputable jurisdiction such as Ireland. This entity bills the sponsor and takes a commission before sending the cash on to the haven.

“Ireland is just used as a conduit to transfer money on to the havens,” said the financial adviser. “It is a very aggressive tactic. Most of the cash goes to the Caribbean, and you only have to pay 12.5 per cent on the small amount you leave in Ireland.”

Financial practice, BDO, in Dublin advises many top sports stars but it does not construct the aggressive image rights structures used by some football stars.

Ciaran Medlar, a BDO partner and its head of tax services, said the complexity and cost of maintaining the structures unearthed by Football Leaks means they are “not widely used or suitable”. And while foreign media often cite Ireland’s 12.5 per cent rate as central to why this country is chosen, he thinks it is incidental.

“Only a small proportion of the profits are retained in Ireland, so the tax rate will not be the major reason,” he said.

Rather, he suggested, the use of Irish companies within such group structures could “assist in achieving a lower global tax rate and reduced withholding taxes”.

The sports lawyer said the practice is especially popular in Spain and Portugal, where tax-haven companies are often blacklisted. Instead, many footballers first look for a friendly European staging post.

“You could use Malta or Madeira. But Dublin is more familiar and the business environment is very professional.”

Jose Mourinho: had his financial affairs investigated in Spain. Photograph: Jason Cairnduff/Reuters
Jose Mourinho: had his financial affairs investigated in Spain. Photograph: Jason Cairnduff/Reuters


The practice of routing image rights payments through Ireland isn’t inherently illegal in any European state, however.

Tax authorities only become interested for two reasons: they may suspect clubs are paying inflated image rights payments in lieu of taxable wages, or they suspect some of the image rights cash was improperly declared abroad.

Spanish authorities really began to clamp down on image rights in 2015. If the Irish intermediary had no staff to carry out the purported work, for example, that was considered a major red flag.

Medlar said the changing attitude to tax avoidance at a global level is likely to see rule changes introduced that will render image rights structures less effective.

“These aggressive structures are on the last lap,” agreed the unnamed adviser.”

Who are the go-to firms in Ireland?

Many of the footballers whose use of Ireland as a conduit to send cash to tax havens was revealed by Football Leaks are clients of Portuguese superagent Jorge Mendes. His Gestifute agency already has strong links to Ireland via Dublin-registered Gestifute International.

The Irish company, which last year paid dividends of €12 million to Mendes, was set up for him more than 12 years ago by a specialist international tax firm from Cork, HLB Nathans. This firm is now called Moore Stephens, and Mendes’s company is registered at its Dublin office.

Gestifute International’s directors are Andy Quinn, the managing partner of Moore Stephens, and Luis Correia, Mendes’s nephew and a 5 per cent shareholder. Dublin consultant Liam Grainger, who works closely with Moore Stephens using a firm called Procorp Consultants, resigned as a director a month ago.

If Moore Stephens could set up efficient Irish structures for the benefit of Mendes, it could also do it for his clients.

Grainger and Quinn pop up frequently in the Gestifute-linked image rights architecture maintained by Moore Stephens. Quinn is director and sole shareholder of MIM, the main intermediary used by Mendes’s clients. It was set up at around the same time as Gestifute International.

Bob Richmond, a Kildare financial adviser, was also a director until his death last year. Grainger stepped down from the MIM board in 2012, but still files documents via his involvement with Gransec, its company secretary.

Its accounts don’t reveal how much money it has bounced to the Caribbean, but it had €5.5 million in cash at the end of 2015. Football Leaks says it usually took commissions of 4-6.5 per cent. Its 2015 accounts are the first to mention any staff, with two employees noted.

Quinn is also a director of Polaris, which Football Leaks said was more active on advertising deals than MIM and took commissions of up to 20 per cent. Polaris is mostly owned by companies linked to Mendes, while Correia, who also sits on the board, owns a third. Ronaldo’s Tollin previously owned a stake.

Polaris, also registered to the Moore Stephens Dublin office, lists eight staff with average salaries of €67,000. Moore Stephens takes a fee of about €50,000.

Deco and Pogba links

One-time Barcelona star Deco is a former Mendes client who now has his own relationship with Moore Stephens. Quinn sits with Deco, also known as Anderson Luis de Souza, on the board of D20 Sports Management, a Dublin image-rights firm linked to Deco’s fledgling D20 agency.

Pogba, meanwhile, is not a client of Mendes. Rather, he is linked to Mino Raiola, the pizza-chomping superagent who is Mendes’s main rival in the game. Three years ago, when Pogba was at Juventus, Raiola had a dispute with Pogba’s previous agent over image rights. Raiola tried unsuccessfully to register Pogba’s European rights to Blue Brands in Dublin.

In March 2016, after the dispute was settled ahead of Pogba’s move to Manchester United, the rights were reassigned to Blue Brands, established by Dublin-based global trust company specialist Pearse Trust.

Pogba’s rights have since been assigned to a Jersey company. But in recent months, Raiola’s cousin, Vincenzo Raiola, joined the Blue Brands board, suggesting the Irish company is still an important cog.

Pearse recently assigned administration of Blue Brands to accountants O’Mahony Donnelly (OMD), who are based in Clonakilty. So Pogba’s link to the town definitely has nothing to do with pudding.

OMD made no response to a request for comment. Moore Stephens declined to discuss clients and said it works to the “highest professional standard”. MIM said its reputation is based on compliance with “tax, legal and regulatory requirements”. Grainger didn’t respond.

Gestifute, which has previously denied wrongdoing on its behalf and on behalf of its clients, also did not respond. Through Gestifute, Ronaldo also did not respond.

As Juventus fans may find out in Cardiff tonight, he usually prefers to do his talking on the football pitch.


0 comments on NUJ welcomes INM plan to walk from Celtic Media acquisition

NUJ welcomes INM plan to walk from Celtic Media acquisition

The National Union of Journalists (NUJ) has welcomed the news that Independent News and Media (INM) will not be acquiring the regional newspaper group Celtic Media.

In a statement, the two companies confirmed they were walking away from the proposed €4 million takeover.

Celtic Media publishes the Westmeath Independent, Westmeath Examiner, Anglo Celt, Meath Chronicle and Connaught Telegraph newspapers, along with a number of free sheets.

“Following discussions, INM and Celtic Media Newspapers Ltd have taken a decision to move forward on a separate footing,” the two companies said in a joint statement.

The acquisition of Celtic Media by INM would have increased its share of provincial newspaper titles from 13 to 20. It was opposed by the NUJ on the grounds that it would weaken media diversity in Ireland.


0 comments on Football is a tale of two financial worlds

Football is a tale of two financial worlds

When Real Madrid and Juventus clash on Saturday some of the most expensive footballers on the planet will take to the field: Gareth Bale (if he overcomes injury), Gonzalo Higuain and, of course, Cristiano Ronaldo. The combined starting lineups could be worth close to €500 million.

There is another, altogether less-gilded level to the beautiful game, however. And there always seems to be Irish businesspeople sniffing around it.

Low-profile Meath auctioneer and property developer Anthony McMullen has in recent weeks attempted to buy AFC Telford United, which plays in the sixth tier of English football.

According to local reports, McMullen wanted to buy a 51 per cent stake and offered Telford £250,000 upfront, or up to £20,000 per month to build up his stake.

Telford has previously experienced financial difficulties, and wants to raise £500,000. It has already raised a portion of that by selling 35 per cent of the club. Apparently the talks between McMullen and Telford last month went badly, and they have rejected his approach.

This appears to be the fifth club that McMullen has attempted to buy, often in deals fronted by Roddy Collins. He made a play for Longford Town during the crash, but was rebuffed.

Then he tried to buy Scottish club Gretna. Then Rotherham Town. He succeeded in buying a 50 per cent stake in Scottish club Livingston, but failed with a bid to take control of the lot. It has since been taken over by other investors.

Umbro Ireland’s John Courtenay once owned Carlisle, while Irish-Spanish property magnate Darragh MacAnthony chairs Peterborough. Then there is the Irish Drumaville consortium that once owned Sunderland.

What is it with Irish property investors and unfashionable British football clubs? Football investments are for love, but definitely not for money.


0 comments on Noonan triggers sale of AIB in last major act as Minister

Noonan triggers sale of AIB in last major act as Minister

After months of talk about triggers being pulled and buttons being pushed, Minister for Finance Michael Noonan finally did the deed this week and signalled the Government’s intention to float AIB on the stock markets next month.

It marked Noonan’s last major act in office as he prepares to follow Taoiseach Enda Kenny out of Government next week. He called the move a “significant milestone’’ for the Irish banking sector.

The sale of an initial 25 per cent stake in AIB, which was rescued by the taxpayer to the tune of €20.8 billion during the financial crisis, could raise up to €3 billion for the State.

The announcement marked the beginning of a four-week process before shares are listed on the main Dublin and London markets in what will be the biggest initial public offering (IPO) in Europe so far this year.

So, now begins the process of wooing investors. AIB chief executive Bernard Byrne said the focus would be on demonstrating how the bank has turned itself around since the crash, slashing its bad loan book from €29 billion to €8.6 billion.

It doesn’t stop there, though. AIB is to tell potential investors that the remaining bad loans will be mostly fixed within three years – but the manner in which it goes about achieving that could be problematic for the Government.

The bank’s solution could include the sale of some loans to overseas buyers of distressed debt. This would most likely result in a greater level of repossessions against borrowers who refuse to engage with the bank.

To make matters worse, the Government also has to get the public to swallow the fact that the €3 billion it hopes to raise from the sale cannot be invested in public services without breaking the EU’s fiscal rules. Instead the cash is supposed to be put towards reducing the national debt.

Separately, AIB signed an agreement with Green Reit to lease an office building at Central Park in Leopardstown, Dublin 18. The bank is to move more than 500 support staff to the premises, where it will establish a “centre of excellence” in customer digital innovation.

Nama profits

Another legacy of the economic crisis is National Asset Management Agency (Nama), which was set up as a bad bank to take nonperforming loans off the balance sheets of the State’s banks.

This week it published its annual report for 2016, which showed it expects to generate a lifetime profit of €3 billion when it finishes its work by the end of the decade. The report showed the agency generated €5.4 billion in cash and a profit of €1.5 billion last year.

On housing the report showed that, since 2011, Nama and its clients have sold sites with the potential to hold up to 50,000 homes. Just 1,116 houses have been built on those sites, however, while work has started on a further 2,104.

It was in that context that Michael Noonan said landowners who hoard sites that could be used for house-building will have to pay a financial penalty from next year.

There is an issue with investors sitting on empty development sites so they can earn a greater profit as property prices rise. Noonan said the Government will introduce a levy on vacant sites “in the context of next year’s budget”.

This is designed to force such owners to sell the land so it can be used to build much-needed houses. “People who are sitting on land as an asset will find themselves sitting on a tax liability,” he said.

Indeed, David Ehrlich, chief executive of Ires Reit, the State’s largest private owner of apartments, said many private equity firms that snapped up land during the financial crisis are “just sitting on sites” and unprepared to sell.

However, he said Ires Reit was “not a vulture fund”, and is in talks to acquire land to build duplex townhouses to take advantage of rising demand for homes in the city.

Speaking after its annual general meeting, Ehrlich said he was “actively looking at sites” both inside and outside the M50 motorway in Dublin.

Separately, the National Competitiveness Council warned that the State’s housing crisis is having an adverse effect on the entire economy, pushing up wages, threatening inward investment and limiting firms from expanding.

Good job news

There was a raft of jobs announcements, with accounting firm Grant Thornton among them as it announced plans to create 250 new posts over the next 18 months, mostly at a newly established centre of excellence connected with compliance reporting.

On the same day, 430 jobs were announced by drugs company MSD and outdoors retailer Regatta. APC, a Dublin-based firm that works with pharmaceutical companies, announced a major expansion at its headquarters that will double its headcount.

The latest figures for the Live Register showed an additional 2,200 coming off the register in May, which brought it to its lowest number since October 2008, the Central Statistics Office said.

The Government will be hoping to bring the numbers down further, and it unveiled plans for a €60 million regional enterprise development fund geared towards creating jobs outside Dublin.

Meanwhile, the conditions in the State for creating jobs were in the spotlight, as the Republic was ranked sixth in the world competitiveness rankings. That was its second-highest ever placing.

The survey of 63 countries, compiled by the IMD business school in Lausanne, Switzerland, linked our rise in the rankings to the State’s recent economic performance; the ongoing level of inward investment and a “high level” of business efficiency.

The Republic came third when it came to the performance of the domestic economy. It was also ranked third overall for attracting international investment. It was top for business productivity and efficiency; and third again for “positive business attitudes”.

However, it came down the list in the categories of employment, which includes labour-market flexibility, infrastructure and access to finance.

Bad banking

Let’s hope nobody tells them about out banks though, with yet another hefty fine dished out by the Central Bank for breaches to laws aimed at countering money laundering and terrorist financing.

This time it was Bank of Ireland in the dock. It was fined €3.15 million for, among other things, the failure to report six suspicious transactions to the Garda and Revenue Commissioners promptly.

This was the second-largest penalty issued by the Central Bank in relation to the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010. Ulster Bank was fined €3.325 million last November and AIB was ordered last month to pay €2.275 million for similar violations.

Ryanair flying high

In company news, Ryanair published results that showed it grew profits after tax by 6 per cent to €1.316 billion in the 12 months to March 31st. The airline also announced plans to return €600 million to investors through a share buy-back scheme.

Furthermore, Ryanair said it would offer Alitalia a deal that would see it effectively take over the bankrupt Italian carrier’s short-haul business while also selling its long-haul flights on its website.

Separately, Applegreen, the petrol forecourt retailer, is in talks with up to three parties about opportunities to expand its presence in the US market.


0 comments on Irish financier Quinlan advising on €1.3bn Brussels deal

Irish financier Quinlan advising on €1.3bn Brussels deal

Property financier Derek Quinlan is advising a consortium of European investors on an estimated €1.3 billion bid to buy the Brussels building that houses the Belgian finance ministry.

Specialist property industry publication, EuroProperty, reported on Friday that Mr Quinlan’s company, Quinlan Real Estate, is leading the bid. QRE declined to comment on the story, but it is understood that the details are considered accurate.

The deal for the Finance Tower, if it transpires, would be one of the largest property transactions in Europe in recent years. The building was bought more than 15 years ago from the Belgian state for €300 million by Dutch group, Breevast, which had not yet responded to a request for comment prior to publication.

4,500 office workers

The Finance Tower underwent a significant overhaul up to 2008, including the construction of a new 10-storey block adjacent to the original 31-storey building.

It houses more than 4,500 office workers, mostly employees of the finance ministry. The Finance Tower includes more than 2.4 million sq ft of floorspace.

Mr Quinlan, who has lived outside Ireland since the financial crash, has made a comeback of sorts in the property market recently. He was an adviser to the Irish-Pakistani Kajani brothers who paid €8 million this year to buy River House, the old motor tax office just off Dublin’s north quays.

Mr Quinlan later confirmed that he acted purely as an adviser on the deal. He is also reported to be solely an adviser on the Belgian deal, with no equity stake.

The directors of Mr Quinlan’s advisory firm, Quinlan Real Estate, include his wife Siobhán Quinlan.

In its latest accounts, for the year to the end of last June, Quinlan Real Estate had accumulated losses of £480,000.