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Archive for May 21st, 2012

According to the insolvencyjournal.ie. NAMA has had receivers appointed to Wexford developer Pat Neville and Sons Limited, the directors of which are Patrick Neville and Sinead McCarthy. Jim Stafford of Friel Stafford was appointed receiver on 14th May, 2012.

The company was incorporated in 1989 and started life doing contract work for local authorities in Wexford and Dublin. In the 1990s, the company started its development business with projects in Dublin, Louth, Carlow and Wexford.

According to the Wexford People, “the company portfolio included numerous housing developments, hotels and commercial units such as Stillorgan Park Hotel, Glenview Hotel, Co Wicklow, Brackenwood, Balbriggan,Riverside Drive,Dundalk, Ard Alainn, New Ross and Woodside, Bettystown. The company was also involved in building several housing developments in Drogheda, Co Louth, Balbriggan, Co.Dublin, and in New Ross, Gorey and Courtown.”

The founder of the company and apparently the company secretary, Pat Neville is reported to have died in the United States last month at the age of 62.

The appointment has not yet been confirmed in Iris Oifigiuil. There has been an hiatus of foreclosure activity by NAMA since 25th April, 2012 when NAMA had receivers appointed to companies in the Treasury Holdings group. Prior to that, NAMA had been foreclosing on loans on an almost-weekly basis.

Remember you can see a comprehensive list of Irish foreclosure action by NAMA here and in this regularly updated spreadsheet.

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Poor old Professor Patrick Honohan, he wrote the introduction and accompanying letter for the Central Bank of Ireland’s (CBI) 2011 annual report in April 2012. Both were published this morning and the cautiously upbeat tone looks out of place with a EuroZone that once again appears to be teetering as Greece looks set for default/ejection from the euro or even EU, the horror that lies beneath Spanish banks is slowly coming to the surface and indeed Italian banks have suffered their own downgrades recently. Meantime inFrance, there is confusion amidst the rhetoric and solid commitment to seek different solutions to a crisis that has now dragged on for over four years, and we still appear to be lurching from one apocalyptical crisis to another, sometimes spaced just days or weeks apart.

And yet regardless of what is happening elsewhere in Europe, the CBI must deal with matters under its own control and hope that the dice land fortuitously elsewhere. The CBI has been to the fore of a large number of initiatives in the last year to strengthen our banks, both financially and through governance, and to deal with legacy debt and the credit drought. It has had very limited success, but that may have more to with the banks themselves and Government. The stress tests in March 2011 were generally well received in the sense that our bond yields and deposits improved in the immediate aftermath, but then Portugal succumbed to a bailout and the whole edifice was rocked again. There has been deposits stability since the second half of 2011 and reliance on funding from central banks has declined by a quarter, though our banks are by no means able to stand on their own feet yet.

Last week Deutsche Bank opined that Irish banks would need a further €4bn of capital to absorb further losses, but that is notable as one of the few negative suggestions after the 2011 recapitalisation.

Lending by our banks however has declined. In the case of mortgage lending, we saw last week that in respect of Q1, 2012 lending has fallen off a cliff and is now practically moribund. Consumer and commercial lending has also declined though it is difficult to tease asunder the reasons, lack of demand or supply. The Credit Review Office is having some business loan decisions reversed but the evidence is that there are few decisions which are challenged.

We still await meaningful action on the mortgage arrears crisis but that would seem to be in the purlieu of Government rather than the CBI, though it was noteworthy the CBI expressed disquiet at any prospect of the imminent Personal Insolvency Bill leading to further bank losses, particularly on mortgages.

As with last year, the CBI might say it could have been worse but the fact remains that competition is dwindling – in the past year with the merger of EBS with AIB, and the decision to wind down INBS and Anglo. Credit supply is considered weak. And judging by its share price, Bank of Ireland is by no means out of the woods yet.

The financial highlights – profit at the CBI was €1.2bn (up from €0.8bn in 2010), dividend to the Irish Exchequer was €958m (up from €671m), staff numbers were 1,372 (up from 1,226), costs were €184m (up from €131m in 2010, with staff costs up €17m to €104m in 2011). The main reason for the increase in profit was the increase in lending to Irish banks – and I would guess IBRC accounted for most of the interest – both by the CBI directly and by the ECB which remits a portion of its income to the CBI.

Governor Honohan who had already taken a pay-cut from €369,078 to €276,324 gifted €41,740 of his salary to the State in 2011 which meant his gross salary dropped to €234,584. He will receive a gross of €213,000 in 2012 after announcing he will gift €63,324 to the State during this year. There will be some who will carp at these contributions, but for a governor of a central bank in a country with a far-from-healthy banking system, these are huge sacrifices and should be acknowledged as such. Mathew Elderfield, the deputy governor gets €340,000 per annum. Is Governor Honohan’s job any less demanding or important than the €866,000-per-annum chief executive of IBRC, Mike Aynsley?

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