Cantillon: IMF may bring Permanant solution to PTSB legacy issue
Washington DC-based body highlights concern about pace of recovery at PTSB
The IMF said the implementation of PTSB’s restructuring plan “continues to be impeded by a lack of low cost funding for this runoff entity [the non-core part of PTSB]”.
It’s been a busy week for Permanent TSB. On Wednesday, chief executive Jeremy Masding and an entourage of senior officials from the bank and the department of finance travelled to Brussels to meet with EU competition authorities about the bank’s restructuring plan, the latest iteration of which was submitted by the Government in August.
Permo has essentially been split into core and non-core activities with group not expected to return to profit until 2017.
“There is no formal deadline in place for the Commission to respond to the updated version of the [restructuring] plan. However, the deputy may have noted that Permanent TSB, at its interim results presentation on August 29th, stated it was aiming for approval before year end and I have no reason at this point to believe otherwise,” was the minister’s reply.
Yesterday, the International Monetary Fund once again highlighted its concern about the pace of recovery at PTSB.
The Washington DC body said the implementation of the restructuring plan “continues to be impeded by a lack of low cost funding for this runoff entity [the non core part of Permo]. The authorities will follow up with further analysis of PTSB’s profitability prospects and funding options but it is necessary to implement a lasting solution for PTSB.”
The IMF’s mission chief to Ireland Craig Beaumont stressed later that it’s not the fund’s view that Permo is “beyond hope”. Rather, that it’s taking too long to return to profitability.
In a statement issued to The Irish Times, Masding expressed hope that the decision on that restructuring plan would be made in the “coming months”. He said the bank and the IMF were on the same page in terms of the timetable for its recovery.
Consensus in politics is rare in Ireland but Mr Noonan and his opposition counterparts in Fianna Fáil, Michael McGrath, and Sinn Féin, Pearse Doherty, were all of the view on Thursday that the survival of Permo was hugely important in the context of providing competition for consumers and making credit available.
It now remains to be seen if the IMF can bring some leverage to bear to find a solution to Permo’s legacy issue that might allow it return to profitability sooner than currently anticipated.
We would all welcome that.
Twitter’s first flight may not be smooth
Excitement over the upcoming Twitter flotation is such that some investors mistook the worthless stock of former electronics retailer Tweeter for the social media firm this week, sending its shares up more than 1,000 per cent.
The real home of the 140 character message is valued at an estimated $10 billion, but the little blue bird revealed in papers filed with US regulators the firm that it made a loss of $69 million in the first six months of this year on revenues of $254 million. Many analysts are confident, however, that revenues are set to increase significantly as more advertising comes on stream.
About 85 per cent of Twitter’s revenue comes from advertising on the site. Its other revenue stream comes from selling its public data, known as “firehose”, which companies can use to analyse consumer trends and sentiment towards brands.
The tricky issue for Twitter is in how it increases its ad revenue while avoiding disruption to the user experience. Rivals can also undermine the business model by disabling integration with the social media site. In its filings the firm identifies this risk, giving the example of how after Facebook bought Instagram, its photo integration was disabled with Twitter. Instagram photos are no longer viewable within Tweets and users are redirected to Instagram to view photos through a link within a Tweet.