TheStory.ie

The Revenue Commissioners published their quarterly list of tax defaulters during the week. It’s always worth a scan through if you’re a nosey bollocks who doesn’t like tax avoiders journalist at a loose end.

Revenue Tax Defaulters List for June 1 to September 30 2009

€179.4m was recouped altogether, with details of the big-baddies being made public. It was a colourful bunch this time too, a postman, the owner of a lap-dancing club, a taxi driver, a singer and – with impeccable timing – a priest, were all amongst the redden-faced. The usual types were in there of course also – property developers, construction industry types, farmers, auctioneers, company directors, etc.

The papers and broadcasters, as is their perogative, covered the stories of the lads and lassies fined big numbers. I prefer the other stories though, the ones that tend to get glossed over… you know, the people fined just forty or fifty grand – as opposed to millions – for trying avoid contributing to the country’s coffers…

It’s been a tough few months for Michael McDarby and Séan Acton. Back in February 2008 the two lawyers from Mayo were dragged before the Solicitor’s Disciplinary Tribunal (SDT), where they were found guilty of eight counts of professional misconduct. An embarassing incident, no doubt. According to the Mayo News, the counts included… Continue reading “The tax defaulters list; June to September”

Four days ago on this site I noted Miriam Lord’s article in The Irish Times about representatives of Bank of Ireland and AIB appearing before the Oireachtas Finance Committee. Ms Lord wrote…

The Bank of Ireland went so far as to say it wouldn’t have to go back to the Government next year for a further handout. Sheehy was similarly upbeat about AIB.

Today RTÉ Business Editor, David Murphy spoke on the One O’clock News (TV) on the likely repercussions of this NAMA-related story…

Previously people expected that the discount on the loans would be in the region of 18% for Bank of Ireland. [Today] Bank of Ireland has got more information regards how the loans will be valued and it has checked it against its own loan portfolio and as a result it has given a broad hint that the figure will be 25%. That’s a big change there, that means they will require more capital…

Later on the Six One Mr Murphy went a step further…

Bank of Ireland had expected a discount of 18% on the €16billion of loans it will transfer to NAMA, now that discount will be more like 25%. That means the bank will need more capital, potentially a billion euro more than expected.

If things are bad for Bank of Ireland they are worse for AIB which is to transfer a much bigger €24 billion of loans to NAMA.

The weaker position of both banks means using the stock market to raise funds is a less likely option. The only alternative is getting State money to stay above water.

RTE News understands one option under consideration by Government is for the State to convert the €3.5 billion already given to both banks into ordinary shares to plug the gap in their finances – but that would imply massive state shareholdings.

It looks like Cearbhall was right to be sceptical…

What I find odd – and believe me I’m no business expert – is during the cited exchange at the Oireachtas Finance Committee Deputy Michael McGrath said to Richie Boucher of BOI that the discount was never going to be near 18%. Not that he should have needed notifying. This, Mr Boucher conveiniently ignored in his reply…

Richie Boucher: … Bank of Ireland’s modelling, based on various assumptions with regard to what could be the discount, means that we can take the discounts that might be envisaged and still be in a position to meet the regulatory capital requirements. However, in the medium term we will be obliged to look to the level of capital that is appropriate. The level of capital we require is also proportionate to our balance sheet.

Deputy Michael McGrath: Realistically, if the write-off is going to be of the order of 30%, or a further €4 billion to €5 billion, what level of additional funding – whether from the State or from international investors – would the bank require to satisfy the requirements of the markets?…

Richie Boucher: …Based on the modelling we have carried out, our core tier 1 capital will be significantly ahead of the regulatory requirements and will in fact be such that we believe it will satisfy the bond markets on which we are reliant. We are satisfied, taking into consideration the potential discounts we would be obliged to accept in respect of the transfer of such loans, that the bank will be significantly in excess of the requirements relating to its being able to continue to fund its balance sheet on the markets. I do not believe that this will be an issue.

There’s a most interesting and pertinent piece of political writing in today’s Irish Times by Miriam Lord. She watched high-ranking bankers appear before the Oireachtas Finance Committee.

Eighteen months ago…

…when the same Oireachtas committee wanted to ask the same banks about the way they conducted their business, fewer chairmen and chief executives deigned to turn up. To add insult to injury, the bankers then proceeded to talk down to the worried politicians, assuring them their fundamentals were sound.

…Richie Boucher, before his big promotion, was present back in July of 2008. “Unequivocally,” he declared, “we do not believe there is a Northern Rock lurking in Ireland.”

His colleague, David Guinan, stated: “We pride ourselves on the fact that we have been and continue to be very prudent and responsible.” Donal Forde of the AIB offered the following gem: “In regard to lending standards in AIB, we have behaved very responsibly in recent years and we have maintained a very prudent credit stance.” (Correct. There was a whole shed load of them.)

The highlight of the committee meeting was supplied by Willie McAteer, then executive director of Anglo Irish Bank. “Clearly, the whole perception of Ireland and the negative sentiment towards it are obviously of concern to us. However, this sentiment is not borne out by the fundamentals.”

Here’s another rib-tickler from Willie: “I reject the suggestion that banks have been foolhardy in recklessly lending and driving up values . . . in my experience, the banks have been prudent.”

Yesterday…

The Bank of Ireland went so far as to say it wouldn’t have to go back to the Government next year for a further handout. Sheehy was similarly upbeat about AIB.

Do you believe them this time ’round?

Read Miriam Lord’s article in full on Irishtimes.com