Inside the world of business
Going Stateside for business
AT THE end of the month, Ireland’s “first ever private industry-led foreign direct investment initiative” will be held in Boston. It is quite a mouthful, but that does not make it a bad thing.
The Ireland Gateway to Europe 2012 Expo is the brainchild of a number of professional services firms including MKO chartered accountants, ByrneWallace, Sigmar Recruitment and the FKM group.
The event is aimed at US companies and investors that might be interested in coming to Ireland, but what is novel about it is that it is also clearly targeting US professional services firms whose clients may well benefit from investing in Ireland.
It is a clever move on several fronts. These firms are not normally targeted by the IDA and so the initiative has the potential to bring the Irish proposition to a wider audience, without treading on the IDA’s toes.
It is also a smart move by the firms involved because they stand a good chance of picking up referred work from the professional services firms that attend, particularly if any foreign direct investment projects arise directly out of the trip.
The motivation of the Irish firms involved clearly falls into the enlightened self-interest category. But that does not mean they are not deserving of Government endorsement, if not outright support – particularly as they are not cutting across the work of the IDA, which understandably is the focus of the Government’s effort to sell Ireland as a foreign direct investment destination.
Feelers have been put out but as yet no official endorsement has been forthcoming. There is something of a chicken-or-egg situation about the Government’s position. Nothing would procure official support as quickly as a few high-profile US firms on the guest list. But, by the same token, nothing would add to the credibility of the initiative as a Government Minister agreeing to turn up on the day.
Nothing ventured, nothing gained.
Confirmation of Irish Life's future life
AMID ALL the fuss over the “leaking” this week of the European Commission’s assessment of Ireland’s performance and prospects, confirmation of the immediate future for Irish Life was somewhat overlooked.
Expectations that Canada Life would pay more than €1 billion to acquire the business collapsed late last year in the wake of increased bond market volatility after the unexpected failure of an auction of German debt.
Since then it has become increasingly clear that the State would be obliged to step in to fill the void, a move that would also require it to invest up to €1.3 billion in the business to complete its recapitalisation. But the Government has remained schtum on the issue.
Until now. The commission’s winter 2011 review of the economic adjustment programme for Ireland clarified that the State would, “subject to Government approval, purchase Irish Life from ILP”.
“Furthermore . . . it will provide, if needed, any remaining balance of the required capital of about €1.3 billion following the purchase of Irish Life.”
The original deadline for the sale of the end of 2011 has been pushed back to the end of the second quarter of this year. While little surprise, it will at least close the file on financial sector recapitalisations.
There was some surprise, however, at the scale of loan loss provisions announced by ILP in respect of its residential mortgage book at Permanent TSB, also this week.
Impairments more than trebled to €1.4 billion from €420 million previously.
Meeting tighter Central Bank guidelines – which now require all loans with 90 days of arrears to be classed as impaired – had an effect as it halved the previous threshold.
However, there was also a significant increase in the number of loans in arrears for more than the three months.
In light of the Permanent TSB update, interest will switch to what impairments are likely to feature in the figures of State bank AIB when it reports full-year figures, expected next week.
FBD, Paddy Power, Grafton and AIB are all due to report full-year results next week.
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