Bank of Ireland chief executive Francesca McDonagh is likely to have drawn a few blank stares from members of the Oireachtas finance committee this week when she insisted she was pressing ahead with a "robust" internal investigation into the tracker scandal.
In fairness to McDonagh, she has only been in the job four months, and the crisis is not of her making, but the thought of bankers investigating bankers is unlikely to have set anybody’s mind at ease that the bottom of all this will be reached.
Whatever about the naysayers, McDonagh said individuals found to be at fault will be held accountable. However, she also said that from “the work I’ve seen” there was “no intent to charge customers incorrectly”. Move along now.
McDonagh also revealed that 14 of the bank’s borrowers lost residential properties as a result of the scandal, including eight owner-occupiers and six buy-to-let borrowers.
Ulster Bank was also in the dock. The bank has been criticised by members of the committee recently for dragging its heels in dealing with all this. It’s fair to say members’ humour won’t improved on talk of yet more affected borrowers.
The bank's chief financial officer Paul Stanley said the bank expects the number of customers caught up in the debacle to rise within the next few weeks as it continues to engage with regulators on the matter.
The Irish Times reported in December that the bank's current number of 3,500 affected cases may rise by as much as 3,000. Stanley also said that about 15 owner-occupier borrowers and one buy-to-let customer lost their homes.
And the carnage doesn’t stop there. The 200 staff Ulster Bank has working on resolving the scandal stand to lose their jobs once the sorry mess is cleared up. Stanley said “a number of those staff were at risk already of redundancy” when the scandal broke.
He also said the affair had boosted the bank’s income by up to €120 million over a decade.
As the redress and compensation programme gathers pace, banks have set up appeals panels to deal with the potentially thousands of customers who may query what their bank is offering them.
Greencore chief eats humble pie
The world of finance is often clouded in bluster and doublespeak, but credit to Greencore chief executive Patrick Coveney who took the unusual step at this week's annual general meeting of admitting the company "hadn't delivered for shareholders".
Coveney held his hands up and said the convenience food giant had underestimated various restructuring and investment costs associated with acquisitions and divestments, and had “made a mess of its IT investment”.
“In truth, we’ve been struggling a bit,” he said – and, to be fair, he’s right. The company’s share price tumbled nearly 15 per cent over the year, while the “mess” over IT triggered a €33.7 million impairment charge before a 74 per cent slump in pretax profits.
There was better news for another Irish food group as Total Produce acquired an initial 45 per cent stake in US-based Dole Food Company for $300 million in cash (€242 million), with the expectation it will buy the remainder within five years.
The deal was described as a significant step in the company’s history, bringing together two global brands and creating the world’s leading fruit and vegetable group.
Staying with food, Swiss-Irish baked food company Aryzta finally managed to shift its troubled Cloverhill facilities in Chicago. Mind you, the owner of Cuisine de France is likely to be walking away from the asset with a significant loss.
On top of the fact that Cloverhill has bled the company’s North American’s revenues, Investec estimated that the sale to Hostess Brands is likely to be for considerably less than the touted €100 million. Aryzta acquired the facility for around $390 million in 2014.
Meanwhile, in Brussels, the long-awaited beef deal between the EU and the Latin American countries of Mercosur may be just a matter of weeks away, with ministerial meetings to take place on Monday.
Emissions scandal hits horror movie territory
It sounds like something from a bad horror movie, but revelations this week of emissions tests on monkeys in the United States and 25 human volunteers in Germany have brought the scandal to a whole new low.
Volkswagen, alongside BMW, Daimler and Bosch, co-financed tests on monkeys and human volunteers that involved inhaling emissions that included noxious nitrogen dioxide.
The German government understandably flipped and said the tests were “justified by nothing”. VW chief Matthias Müller described the tests as “wrong, unethical and repugnant” before he conceded that “the crisis at Volkswagen is not yet over”.
The European Commission also upped the ante, giving Berlin until Monday to present effective measures for cleaner air – or be hauled before the European Court of Justice.
The effects of Dieselgate are being felt in the Republic too, with recent scandals coupled with political promises to ban diesel cars by 2030 contributing to a fall of 17 per cent in sales of this kind of car during January compared with last year.
New car sales generally for the all-important month of January were down 4.8 per cent on 2017 to 37,125. In contrast, used car imports rose 20.3 per cent on the same month last year, with 9,061 cars brought into the Republic last month.
Then there’s the move to electric, which has yet to take hold. Taxi drivers and operators of other public service vehicles are set to benefit from a new €7,000 grant scheme aimed at encouraging them to opt for such vehicles, as the Government moves to tackle the emissions issue.
Eir departure leaves a vacuum in National Broadband Plan
The Republic and major infrastructure projects are simply not comfortable bedfellows.
The latest mess concerns the Government’s long-awaited rural broadband scheme, which was thrown into disarray this week with the surprise withdrawal of Eir, the State’s largest telecoms group, from the procurement process.
Eir, which had been favourite to win the contract, said it was withdrawing because the risks had become “too great”, citing “growing uncertainty” about regulatory and pricing issues.
The move came just months ahead of the scheduled start of the State-subsidised scheme, which aims to bring high-speed broadband to 542,000 homes and businesses in rural parts of the State, which are currently not served by broadband providers.
Eir’s exit leaves just one bidder – the consortium led by energy group SSE and telecoms firm Enet – in the procurement process, raising serious questions about competitiveness and the Government’s ability to get value for money.
Minister for Communications Denis Naughten insisted the scheme would still be delivered on time and at no extra cost to the taxpayer, but industry sources have said the plan is likely to cost more than the €1 billion previously signalled.
