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Decision time on Ulster Bank’s future draws near

This week could be a big one for Ulster Bank’s 2,800 employees in the Republic of Ireland, its 1.1 million customers, the Irish banking market and the economy in general.

After months of speculation about the possible outcome of a strategic review of Ulster Bank’s Republic of Ireland operations by its parent NatWest, clarity could come on Friday.

That day NatWest is due to report its annual results for 2020 and the strong expectation is that it will provide an update on its intentions.

How did all this start?

The first sign that Ulster Bank’s future in the Republic of Ireland was in doubt emerged in the Irish Times last September.

The report stated (and NatWest subsequently confirmed) that the group had begun a strategic review of its operations in the south, but not the north.

One of the options on the table, it was claimed, was a complete withdrawal from the market here.

But other choices were also to be probed, including a merger and of course continuing to trade here as normal.

Since then, NatWest has remained pretty tight-lipped, sticking to the line that it continues to review its strategy “appropriately and responsibly” in light of the impact of Covid-19 and the challenges to the economy.

It also has said that if any changes are to be made, they will be undertaken with “full consideration of any impact on customers, colleagues and shareholders in the first instance.”

So why is NatWest reviewing Ulster Bank?

Essentially because it thinks it is under-performing.

Royal Bank of Scotland acquired Ulster Bank in 2000 when it bought the then owner NatWest and initially it both fueled and benefited from the Celtic Tiger economy, becoming a significant player in the property development boom of the noughties.

It also expanded, buying First Active in 2003.

But as boom turned to bust, so too did Ulster Bank’s fortunes, and its parent (underpinned by the British government) was subsequently forced to bail the lender out to the tune of £15bn over a number of years from when the banking crisis hit in 2008.

For the following six years, the bank struggled to make headway in the market, weighed down by non-performing loans and the cost of restructuring and downsizing its balance sheet.

In 2014 it finally made a profit again, but even since then the bank hasn’t been able to capitalise fully on the recovering economy.

Ireland is a relatively small banking market and Ulster Bank is only a medium sized player in it.

It has also suffered, like all banks, from the low interest rate environment, weak credit demand at times and the requirements to hold much higher levels of capital than normal due to the legacy of the crash.

At 26%, its reserves ratio is twice what other lenders need, tying up as much as €2bn in capital that could be used elsewhere across the NatWest group.

Throw in the cost of ongoing bailout dividends to its parent (which rebranded as NatWest last year) and the price of dealing with the fallout of its own mistakes on issues like tracker mortgages and poor IT systems, and you quickly begin to see why NatWest decided to run the rule over it again.

Hasn’t Ulster Bank reformed itself though?

Yes, to an extent it has.

Pre-pandemic it had reduced the proportion of its loan book that is not performing to under 7%.

It has also taken costs out of its operations, announcing it was planning to reduce its workforce by 266 people last year.

It slimmed down its branch network to 88 through the closure of 22 outlets around the country.

The lender has also made progress in moving to a digital first model, despite high-profile IT hiccups, and has continued to successfully leverage the 20% of the small business market that it holds.

It has also aggressively targeted the mortgage market in the face of increased competition.

Despite all this though, its cost-income ratio remains high at 98.4%, well above that of the wider group’s 66.9%.

And operating profits have remained modest.

“Add in the likely long-lasting impact of the Covid-19 pandemic on households and businesses and it is clear that Ulster Bank continues to face challenges.”

So how likely is it that Ulster Bank will wind down its operations in the Republic of Ireland then?

Nobody knows for sure and it is possible that on Friday NatWest will say it is going to keep the status quo.

It did this once before in 2014 when it (RBS then) hired Morgan Stanley to conduct a review, but ultimately decided to stay.

The group could also say on Friday that it has yet to conclude its review process, drawing out the agony further for staff.

But within the industry insiders think the fact that NatWest has left the question remain unanswered for so long now, is not a good sign of its future intentions.

The uncertainty has proven unsettling for staff and customers alike, undoubtedly damaging business, and has also provoked criticism from politicians.

What are the options for an exit?

It could try and sell the whole operation as a going concern to another player.

But this seems unlikely given the problems outlined above with the business.

If NatWest can’t make a go of it, then how would another owner?

So if a decision is taken to exit, then the most likely scenario would be an orderly break up of the bank, with different parts sold to different institutions over a protracted period of several years.

It was reported in October that Cerberus was eyeing the entire €20.5bn loan book, but Ulster Bank said at that stage no talks were taking place.

Such a sale to a so-called “vulture fund” would be politically very controversial, even though borrowers’ terms and conditions would in theory transfer with the loans.

Private equity firm Lone Star was also recently reported by Bloomberg to be lining up for a bid for some or all of the business should it go on the market.

For all its faults, Ulster Bank does have attractive elements, including €22 billion of deposits, the joint third largest mortgage book in the country and a 20% share of the small business lending market.

Although as one banking source put it last week, most would “run a mile” from the deposits given the negative rates environment and the cost of holding cash.

What about a merger with another bank?

There has long been talk of the need for a third pillar in Irish banking to rival the dominance of AIB and Bank of Ireland.

The natural components of this would be a combination of some or all of Ulster Bank, Permanent TSB (PTSB) and KBC Bank Ireland.

But it has never happened and would require a substantial injection of funds as well as political will in Permanent TSB’s case, given it is 75% owned by the Government.

Last month the Irish Times reported that PTSB had retained Morgan Stanley to advise it in relation to Ulster Bank, but only around a potential bid for the SME portfolio, which would be a nice fit for it.

On Thursday, KBC Bank Ireland chief executive, Peter Roebben, told me he didn’t want to speculate, that the bank’s focus was on its day-to-day business, that if something were to happen it would always take stock, but it is not in any formal process whatsoever.

A move by AIB or Bank of Ireland to merge with Ulster Bank seems less likely, but they clearly would be interested in looking at parts of the business, were it up for sale.

How serious would an Ulster Bank exit be?

Given it has been around for 185 years, operating in the Republic since 1860 and is Ireland’s third largest bank, it clearly would be significant.

For staff, there would be the prospect of many or most losing their jobs over time, in a market where all the other Irish banks are also reducing their workforces, something the Financial Services Union is very concerned about.

Customers would likely see their loans sold to other lenders or funds and would have to move their current accounts to alternative banks.

They would also have to find a new home for their deposits, although a deal could be done by Ulster Bank with another bank on that front.

And branches in many small towns around Ireland would surely close.

In terms of the wider banking landscape, the market would lose another player at a time when it needs more competition, not less.

Since the financial crash lenders including Anglo Irish, Irish Nationwide, Bank of Scotland Ireland, Nationwide UK, Danske and Rabobank have all exited the retail market for various reasons.

The Central Bank has said the effects would be felt most in SME lending.

While on Tuesday Minister for Finance Paschal Donohoe said the consequences would be “very serious” for the economy, employment and credit.

Points he said he has made directly to NatWest and to the British Government which owns 62% of NatWest.

Friday may reveal whether either took heed, or ultimately whether it will come down to a simple equation of business being business.

Article Source – Decision time on Ulster Bank’s future draws near – RTE – Will Goodbody

Copyright and Related Rights Act, 2000

Are banks about to start charging us for our savings?

It may be hard to believe for those who availed of it, but it’s 20 years since Ireland’s arguably most famous and controversial savings scheme was launched.

In an attempt to encourage people to take some money – and a bit of heat – out of an economy that was starting to boom, the then minister for finance, Charlie McCreevy, introduced the Special Savings Incentive Account.

The SSIA was a simple idea with a very attractive prospect. For every €4 the saver put into a special account that was left untouched for a number of years, the State added €1.

It was incredibly popular but criticised by some who said it helped fuel the property boom, as well as a wider over-heating of the economy, when the accounts matured.

One financial crash, a subsequent recovery and a pandemic later, governments and regulators have the exact opposite problem and are now trying to encourage people to spend, not save.

Irish consumers – once bitten, twice shy from a brutal recession – have collectively been paying down debt and saving money with considerable gusto.

And the pandemic super-charged the latter practice.

According to the most recent figures from the Central Bank, collectively we put €950m on deposit in December alone, bringing deposits to an historic high of €125bn, representing growth in savings of around 13% last year.

Rock bottom rates

For several years now, Central Banks been trying to encourage people to spend their hard-earned cash, and even borrow some.

One instrument they use to do that is interest rates.

By dropping rates to zero at the European Central Bank level, banks in the euro zone can notionally get access to very cheap money and distribute loans to businesses and consumers at low rates.

At the other end of the scale, it makes saving money less attractive because the banks are offering negligible returns for deposits.

So determined was the ECB to get money flowing in the euro zone economy that they introduced negative interest rates on deposits, first doing so almost seven years ago now.

How can they offer an interest rate below zero?

The practice of levying negative interest rates has become commonplace in recent years.

Negative rates are now frequently charged on government debt, which effectively means an investor who buys a government bond pays interest on it, which sounds counter-intuitive when they’re supposed to be making money from the government on it.

Similarly, at least one Danish bank has applied negative rates to mortgages, meaning the mortgage holder actually gets a small return from the bank every month when they make their loan repayment.

When it comes to deposits, the ECB has been charging banks for parking excess money (above that which they’re required to hold in reserve) in the ECB’s overnight deposit facility, moving from a rate of -0.1% in 2014 to -0.5% now.

In other words, it’s costing the bank to hold our savings and deposits.

“Every incremental €1 billion deposited with the ECB in excess of minimum requirements equates to a charge of €5 million,” Davy banking analyst Diarmaid Sheridan points out.

That’s a significant hit to income at a time when lending rates are also falling and consumers, on the whole, are reluctant to borrow.

Why don’t they charge us for deposits then?

So far, they’ve held off from doing so, except for larger institutional and corporate depositors.

Credit unions, for example, are being charged for lodging their own customers’ deposits into the banks, explaining why many have now started placing limits on individual deposits from their members.

Bank of Ireland wrote to pension fund investors last summer advising them of its intention to charge negative interest rates for holding cash.

The bank’s chief executive Francesca McDonagh also indicated that the bank was to start levying negative rates on SMEs (small and medium sized corporates) with deposits in excess of €2.5m.

AIB charges negative rates to businesses holding more than €3m in their accounts while it has cut rates on most personal accounts to zero.

The bank previously indicated that it would look at imposing negative rates on high-net-worth individuals with balances of more than €1m.

Ulster Bank also charges negative interest rates on savings over €1m held by business customers and institutional clients.

Are regular savers next in line?

Negative rates for retail customers are already here.

The German digital bank N26 became the first bank to move in that direction confirming last October that it would charge negative rates on deposits in excess of €50,000 (with the rate being charged only on the portion above €50,000).

The Sunday Times reported in recent weeks that some of the main pillar banks were seeking to broaden the base of deposits that would be subject to interest rates.

Customers with large account balances would be targeted initially in the move which, the paper said, would likely be led by AIB.

In a research note, Diarmaid Sheridan of Davy said the dual challenge for banks of significant increases in deposits and negative interest rates was unlikely to change for years.

“There is an inevitability to the introduction of negative rates into retail deposits to offset some of these headwinds,” he said.

Is this going to happen soon?

One banking insider said the phasing in of negative rates on retail deposits was likely to happen sooner rather than later, but that they would be introduced on a phased basis and at a very high level of savings initially – perhaps €500,000 – and gradually reduced from there over time.

He said the first moves could possibly be announced in the coming weeks when banks publish their full year results and Ulster Bank is expected to announce its future plans for the Irish market.

“If Ulster Bank were to exit, a big chunk of deposits would be needing a new home and no bank – other than maybe KBC – wants to receive that.

“The banks are likely to want to make any new policies clear and get them out there before any of that money might start to migrate and find a new home rather than creating a fuss in six months’ time,” he said.

KBC, for its part, has said it has no intention of introducing negative rates at this time.

Speaking to RTÉ on the publication of its full year results this week, the bank’s chief executive in Ireland said it was in the unique position in the market here of being able to source beneficial funding rates from its Belgian parent, which he described as ‘hugely over-liquid’.

“I don’t see any need today to start considering negative rates for retail deposits, far from it,” Peter Roebben said.

How much would negative rates cost me?

Assuming that the main banks do start levying negative rates on deposits, it depends on what rate they apply and on what level of savings.

Starting at €1m would affect a small, but significant enough cohort of savers.

According to Central Bank figures from the middle of the last decade, close to 1,800 households had deposits in excess of €1m. That number has likely grown since.

If we take the €500,000 threshold and assume the banks apply the full -0.5% rate to the full amount of savings, that would amount to a charge of €2,500 a year.

We have €100,000 saved for a deposit on a house. If they gradually reduce the threshold, how much might it cost us?

A few years ago, you could have realistically expected to get a return of 1.5% per year on that deposit. 

That would equate to €1,500 interest, on which DIRT (Deposit Interest Retention Tax) of 33% would be applied.

That would have left you with a net return of €1,000 – a nice boost to your nest egg.

If we assume the bank eventually introduces negative rates on amounts above €50,000 – as in the case of N26 – and passes on the full -0.5% ECB rate, in this new scenario that same €100,000 would be eroded by €250 per year by sitting in your deposit account, or by roughly €20 per month.

It’s not a massive loss in the context of the size of the saving, but it would be an alarming new departure for a habit that we’re so used to getting rewarded for.

Added to that, if and when inflation picks back up, the real value of your savings could be further eroded.

Are there alternatives to deposit accounts?

As part of this process, the banks are widely expected to introduce some low-risk investment products that would allow them to direct individuals with large deposits towards some alternatives and hopefully dissuade people from hoarding cash at home.

From a banking perspective, that largely solves the problem.

Deposits would become an asset with some fee income attached rather than a cost liability and the banks would not be pushing back against valued customers who may be bringing unwelcome negative rate deposits with them.

“This is the long-term solution. They’ll be invested in short term government bonds or short term highly rated investment grade corporates,” one banker explained.

“They’d be very low risk, but they won’t be zero risk.”

But then large deposits are no longer risk free either with rules around ‘bail-ins’ meaning that deposits over €100,000 can be hit in the event of a bank getting into difficulty.

Negative interest rates are coming, but it may be a while yet before most of us feel the pinch.

Article Source – Are banks about to start charging us for our savings? – RTE – Brian Finn

Copyright and Related Rights Act, 2000

Euro zone growth in 2021 to rebound less than expected

The euro zone economy will rebound less than earlier expected from the coronavirus slump this year as a second wave of the pandemic put economies in new lockdowns, the European Commission said.

But it added that growth in 2022 will be stronger than earlier thought. 

The Commission forecast economic growth in 19 countries sharing the euro would be 3.8% this year and the same in 2022, rallying from a 6.8% drop in 2020. 

Last November, the Commission forecast 2021 euro zone growth at 4.2% and 2022 growth at 3.0% against a 7.8% recession in 2020. 

“The near-term outlook for the European economy looks weaker than expected last autumn, as the pandemic has tightened its grip on the continent,” the EU executive arm said in an interim economic forecast for the 27-nation bloc. 

“The European economy is thus expected to have ended 2020 and started the new year on a weak footing,” it said.

“However, light has now appeared at the end of the tunnel. As vaccination campaigns gain momentum and the pressure on health systems to subside, containment measures are set to relax gradually,” it added.

With the lockdowns still in place, the euro zone economy will contract again in the first quarter of 2021 after shrinking in the last three months of 2020. 

But activity is to pick-up moderately in the second quarter and more vigorously in the third, led by private consumption with additional support from global trade, as the vaccination campaign accelerates. 

France and Spain will see the strongest growth rallies this year of 5.5% and 5.6% respectively, having suffered some of the deepest contractions last year.

They will also continue to be among the highest growth countries also in 2022. 

Meanwhile, Ireland’s overall GDP growth is projected to come in at 3.4% in 2021 and is set to reach 3.5% in 2022 on the back of strong private consumption, exports and a recovery in investment.

Consumer price growth is to accelerate closer to the European Central Bank’s goal of below, but close to 2% over the medium term, the Commission said.

It forecast inflation at 1.4% in 2021 and 1.3% in 2022, up from 0.3% in 2020. 

“These projections are subject to significant uncertainty and elevated risks, predominately linked to the evolution of the pandemic and the success of vaccination campaigns,” the Commission said. 

“There is also a risk of deeper scars in the fabric of the European economy and society inflicted by the protracted crisis, through bankruptcies, long-term unemployment, and higher inequalities,” it said. 

UK to take much bigger GDP hit from Brexit than EU 

The European Commission also said today that Britain’s exit from the European Union will cost the bloc around 0.5% of economic growth over the next 24 months, but Brexit will be more than four times more painful for the UK. 

Britain left the EU at the end of January last year, but kept its full access to the 27-nation bloc’s single market until the end of 2020, when it was replaced by a trade agreement. 

“For the EU on average, the exit of the UK from the European Union on Free Trade Agreement terms is estimated to generate an output loss of around 0.5% of GDP by the end of 2022, and some 2.25% point for the UK,” the Commission said. 

The EU-UK trade deal covers goods, services, investment, competition, subsidies, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination. 

In goods trade, the agreement sets zero tariffs and zero quotas on all goods complying with the appropriate rules of origin – a more trade-friendly option than standard trading terms under World Trade Organisation rules. 

“Compared to the ‘WTO assumption’ that was modelled in the autumn forecast, the EU-UK FTA reduces this negative impact for the EU on average by about a third and for the UK by about a quarter,” the Commission said. 

But the Commission also said that while there were no tariffs and quotas on goods, there were significant non-tariffs barriers for trade in both goods and services. 

“In sum, while the FTA improves the situation as compared to an outcome with no trade agreement between the EU and the UK, it cannot come close to matching the benefits of the trading relations provided by EU membership,” the Commission said.

Article Source – Euro zone growth in 2021 to rebound less than expected – RTE

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Irish economy set to grow by 3.4% in 2021 – Commission

Ireland’s overall GDP growth is projected to come in at 3.4% in 2021 and is set to reach 3.5% in 2022 on the back of strong private consumption, exports and a recovery in investment.

This is according to the European Commission’s Winter 2021 Economic Forecast, published today. 

The Commission said the Government’s extended income subsidy schemes continue to cushion the economic impact of the Covid-19 pandemic. 

It said that limited possibilities to spend, combined with income support imply that household savings will continue to accumulate at a historically brisk pace, which should boost consumption once restrictions are lifted. 

The expected global recovery should also support strong growth in Ireland from the second half of 2021, it added. 

The Commission said it estimates that the economy here grew by 3% in 2020, the only positive growth rate in the EU.

It said the economy was boosted by exports from multinational companies specialising in medical equipment, pharmaceuticals and computer services last year.

The Central Bank’s forecast published last month puts GDP growth at 3.8% this year and 4.6% next year.  

The European Commission also forecast today that economic growth in the euro zone would be 3.8% this year and the same in 2022, rallying from a 6.8% drop in 2020. 

Article Source – Irish economy set to grow by 3.4% in 2021 – Commission – RTE

Copyright and Related Rights Act, 2000

UK can’t have equivalence and divergence – McGuinness

The European Union will strive for close co-operation with Britain on financial services, the EU Financial Services Commissioner Mairead McGuinness has said.

But she said London cannot expect “equivalence-based” access to the EU financial market if it diverges widely on rules.

Yesterday, Bank of England Governor Andrew Bailey urged the EU not to pick a fight with Britain over its huge financial services industry after Brexit.

He said the bloc was demanding more of London than of other trade partners.

This evening Mairead McGuinness told the FT European Financial Forum 2021 in association with the IDA that the EU would strive for close cooperation on financial cooperation with the UK.

“We committed in the joint declaration alongside the Trade and Cooperation Agreement, to establish a framework for regulatory cooperation by the end of March 2021,” Ms McGuinness said.

“We aim to set up a flexible, non-binding framework, similar to the model we have with the US, a voluntary structure to compare regulatory initiatives, exchange views on international developments, and discuss equivalence related issues.”

“On the issue of equivalence, it is an area which we will discuss with the United Kingdom progressively, taking into account the UK’s regulatory intentions on a case-by-case basis and above all looking towards our own interests.”

“There cannot be equivalence and wide divergence.”

She said when the structures have been put in place it wasn’t the case that there would be a body of equivalence to be put in place immediately.

Much of the EU legislation remains the same as the UK’s, she stated, but the EU knows there may be different intentions sh claimed.

“I think what we will be doing is perhaps on a case-by-case basis rather than having a basket of equivalence granted immediately,” she said.

She said the EU is quite confident that what it has done to date has been quite effective and the financial services transition after Brexit had been relatively smooth because of the steps that had been taken.

But Ms McGuinness also said it isn’t a race and shouldn’t be about a competition.

The structures that had been put in place following Brexit were complicated, she acknowledged, but added that was the consequence of Brexit.

Article Source – UK can’t have equivaence and divergence – McGuinness – RTE – Will Goodbody

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People on PUP facing reduced tax credits when they return to work

The Director of Public Policy at Chartered Accountants Ireland has said Revenue will collect the tax owed on the Pandemic Unemployment Payment (PUP) for 2021 by reducing people’s tax credits when they return to work.

Brian Keegan said that this is the normal course of events for most social welfare payments.

But it will come as a shock to PUP recipients because Revenue had previously said that the tax liability for 2020 is payable over four years.

Reductions applied to 2021 tax credits will be immediate on return to work.

Mr Keegan said this means that if a person receives a PUP of €300 a week, then their tax credit will be reduced by €60 to account for the tax due on that payment.  

As a person receives the PUP, their tax credits will reduce so Revenue can “collect in real time”, he said. 

He explained this is deducted from the tax free credits a person receives when working so when an individual returns to work, they will be paid less than they might have expected.

Mr Keegan said this is coming as a bit of a surprise for people because there has not been a formal announcement from Revenue. 

Marian Ryan, Consumer Tax Manager with Taxback.com, said while it might not feel like it, the clarification from Revenue could be seen as a somewhat beneficial development for recipients of the PUP this year.

This is because it means that they will not face a big tax bill next January.

“Rather, the tax that is owed, which would have to be paid anyway, will now be spread out over the course of the year,” she said.

“If Revenue were to treat the 2021 payments in the same manner as they did with the 2020 payments, it would mean taxpayers would face ever-increasing reductions in future tax credits.”

Ms Ryan added that the impact should not be too dramatic on recipients.

“Assuming each recipient has their full 2021 tax credits of €3300 available to them, this would equate to €63 per week,” she said.

“If they receive the full PUP payment of €350, and are taxable at 20%, the PAYE due will be €70 less their €63 tax credits. So the PAYE due on this would be €7 for every week the payment was received”.

Meanwhile, Assistant Secretary at the Department of the Taoiseach Liz Canavan said a total of €5.8 billion has been paid out on the pandemic payment since March last year.

At a media briefing this morning, she said that last week 481,000 people received the PUP, up 1,698 since the previous week and at a weekly cost of €144.6m.

11,000 people had closed their PUP supports since the last payment, she added.

Article Source – People on PUP facing reduced tax credits when they return to work – RTE

Copyright and Related Rights Act, 2000

88% of online shoppers buy from non-Irish sites – PayPal

88% of Irish consumers who shop online bought from websites outside of Ireland during the last year, according to research carried out by PayPal.

The study involving more than 1,000 consumers in Ireland found that almost four in five (78%) of those who bought from websites outside of Ireland spent with UK retailers during this time.

43% bought from websites based in Europe, while 38% spent with websites based in China and 21% purchased products from US websites.

According to the research, those who shop online spent €385 with retailers outside of Ireland in the last year.

This amount was slightly higher than the average amount spent by consumers on Irish websites during the same period, which was €357 on average.

65% of respondents said their main reason for buying outside of Ireland was better pricing, 51% said more choice, while 46% said greater availability.

Meanwhile, 48% said they chose Irish websites due to faster delivery, while 44% wanted to support local businesses.

The survey also revealed that over half of Irish consumers expect to buy more products than before from international retailers over the next year.

Joachim Goyvaerts, Director of Ireland and Benelux for PayPal, said the research shows that demand for online shopping has never been greater.

“As a result of the pandemic and recurring lockdowns, it is no longer just important but absolutely necessary that Irish businesses provide a digital offering.

“Of course, they shouldn’t look at this as a short-term investment because the growing dominance of online shopping won′t ease – even when restrictions do,” he said.

Article Source – 88% of online shoppers buy from non-Irish sites – PayPal – RTE

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Business leaders concerned at pace of Covid-19 vaccine rollout – IoD

33% of businesses say a slow roll-out of the Covid-19 vaccination programme is the single biggest risk facing their organisation, according to new research by the Institute of Directors (IoD) in Ireland.

An extension of Level 5 restrictions beyond next month is seen as the second biggest risk at 23%.

According to the research, 78% of business leaders believe the pandemic will have a negative impact on the bottom line of their business this year.

The findings of the IoD’s quarterly Director Sentiment Monitor, to be published in full at the end of February, reveals that 70% of business leaders expect most staff to return to the workplace in the second half of the year.

Aside from Covid-19, the study reveals that Brexit is also of concern to business leaders, with 56% of respondents saying it will have a negative impact on their firm in 2021 and just 9% believing it will have a positive impact. 

Meanwhile, 56% think the Government should provide further Brexit supports so that Irish exporters and importers can trade more effectively with the UK.

Maura Quinn, chief executive of the Institute of Directors in Ireland, said the uncertainties and challenges of last year have continued into 2021.

“Business leaders are clearly concerned about the pace at which the Covid-19 national vaccination programme is being rolled out.

“It is not unrelated that our research also finds that business leaders see the final two quarters of the year as the most likely period when most staff can return to the company workplace.

“With mass vaccination offering the tantalising prospect of a return to some semblance of normality, it is to be hoped that, once supply issues are resolved, the rollout of the vaccination programme will pick-up pace,” said Ms Quinn.

Article Source – Business leaders concerned at pace of Covid-19 vaccine rollout – RTE

Copyright and Related Rights Act, 2000

Irish banks ‘latecomers’ on digital services – Deloitte study

Irish banks lag behind their global counterparts when it comes to their digital services offering.

This is according to a study of banks globally carried out by professional services firm, Deloitte, which is based on input from 5,000 customers of around 320 financial institutions worldwide.

The Digital Banking Maturity Study places Ireland in the last of four categories of digital service offering.

While Ireland is still considered a digital ‘latecomer’, banks here are moving closer to the third category of ‘adopters’.

Banks in Turkey, Spain, Poland and Russia maintained their position in the first category of ‘digital champions’, according to the study.

Spanish banks Santander and BBVA are also in this category.

“While Ireland’s banks do well on information gathering and sharing, day-to-day banking and expanding relationships beyond banking, they need to do more in the areas of personal finance management and investment services,” David Dalton, Partner and Financial Services Industry leader at Deloitte Ireland, said.

The study coincides with moves by four of the main banks here to work together to develop digital payments services to counteract the threat from financial technology companies like Revolut and N26.

“Banks like N26 and Revolut have shaken up markets elsewhere and they have a presence in Ireland. However, until they can offer a full suite of services, such as mortgages and pensions, they will remain in the challenger bank space,” Mr Dalton added. 

“If they were to make moves towards offering those services it would certainly shake up the traditional landscape of the five pillar banks here.”

Yvonne Byrne, Deloitte Partner and Digital Financial Services leader, said there was an opportunity for Irish banks to make huge strides with their digital services.

“The market is open for a bank to deliver great customer experience on the basic day-to-day banking services and start exploring bigger, bolder moves to disrupt the market here before competitors take the opportunity to lead the charge,” she added.

Article Source – Irish banks ‘latecomers’ on digital services – Deloitte study – RTE – Brian Finn

Copyright and Related Rights Act, 2000

Firms alerted to Brexit requirements that apply to some workers

Irish companies employing UK nationals working in other EU member states are being alerted to changes arising from Brexit which mean that their employees are now subject to potential work permission requirements.

The same requirement applies to EU national employees hired here who need to travel to the UK for work purposes.

The accounting and professional services firm PwC is drawing employers’ attention to the changes, saying even companies that had carried out detailed advance planning for Brexit were encountering issues in this regard.

PwC is warning businesses in such circumstances that there may also be restrictions and time limits on the activities these employees can carry out as business travellers. 

“Where once a UK national could simply move to another EU member state at short notice, and vice versa, attention and planning now need to be given to such travel arrangements,” Doone O’Doherty, Partner, PwC People & Organisation explained.  

“Not only does consideration need to be given to any new movement of people, EU nationals already resident in the UK as of 31st December 2020 will need to secure their right to live in the UK under the European Settlement Scheme. Similarly, UK nationals resident in the EU will need to secure their status and regularise their position under the specific rules for that country.”

The requirements do not apply to Irish and UK nationals working in either country as free movement between both countries has been retained under the Common Travel Area agreement.

The status quo around the free movement of people for Irish and other EU nationals within the EU 27 also remains.

PwC says businesses need to undertake a thorough review of their workforce and identify any frequent business travellers or those who are likely to be affected by immigration restrictions. 

“Communicating with employees is also important to make them aware of any new pre-travel requirements or steps to secure settlement that they may need to undertake. Consider the potential cost impact of obtaining necessary immigration clearance,” Ms O’Doherty said.

She added that there were issues around social security and the application of Irish PAYE rules to Short Term Business travellers that needed to be considered.

Article Source – Firms alerted to Brexit requirements that apply to some workers – RTE – Brian Finn

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