Business

Investors shun Irish banks amid fears that rate cuts will drain profits and regulators could cap payouts

Seen & Heard: Commercial property’s bid to survive, possible restaurant closures, Waters nears deal to buy Buswells, and TV ads slump in UK

Buswells Hotel in Dublin 2, which is currently for sale. Photograph: Dara Mac Dónaill/The Irish Times Photograph: Dara Mac Donaill / The Irish Times

Sun Dec 17 2023 - 14:56

International investors are shunning Irish banks amid fears that interest rate cuts will sap profits and regulators will cap shareholder payouts, the Sunday Times has reported.

AIB shares have slumped 12.8 per cent in the past month while Bank of Ireland stock is off 6.9 per cent over the same period, despite high earnings and a wider market rally. By contrast, Italy’s UniCredit is up nearly 80 per cent this year, the report noted.

Investors’ concerns include likely windfall taxes and levies, particularly under a Sinn Féin government, and European Central Bank policy changes on dividend payments or reserve requirements.

Analysts say that earnings will fall along with interest rates, or regulators could come between shareholders and capital distributions.

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‘Survive until 25′ for commercial property firms

Commercial property businesses are in for a shake-up next year as assets struggle and investors walk away, according to the Sunday Independent.

It reported that Adam Griffiths, head of global law firm Taylor Wessing’s Irish operation, told a recent conference that commercial property firms had made “Survive until 25″ their motto.

Taylor Wessing expects an increase in restructuring across SMEs next year, according to the report.

“Commercial property activity here is particularly depressed,” Mr Griffiths said. “I can’t tell you why it is 10-15 per cent more depressed than it would be, but the UK isn’t exactly firing, and continental Europe is the same.”

Restaurant owner fears closures after a quiet Christmas

The owner of Hugo’s restaurant in Dublin 2, Gina Murphy, fears there will be casualties in the sector in the new year after a quiet Christmas, the Business Post said.

The increased VAT rate faced by hospitality businesses, coupled with soaring costs of doing business due to increased utility bills and a hike to the minimum wage from January, could be too much for some restaurants to handle, Murphy added.

“Only two of my trainees are on minimum wage, but the vast majority of my staff will also have to get a pay increase because they’re on hourly rates,” she said. “I’ve had to put my own prices up and up and up. There’s nothing I can do about it. If I don’t put my prices up, they don’t cover my costs. I feel that I’ll be fine, but I think we in the restaurant industry are going to see casualties in the new year.”

Eamon Waters close to deal to buy Buswells Hotel

Waste tycoon Eamon Waters is close to a deal to buy Buswells Hotel in Dublin, but other bidders are circling the landmark property also, says the Business Post.

According to the report, Waters’ entity Sretaw agreed to buy Buswells for €16.4 million in August from liquidators Kieran Wallace and Eamonn Richardson of Interpath Advisory, with the deal timed to close on January 1st, 2024.

“Waters’ prospects of landing the property now appear uncertain, however, after the emergence of new bidders,” said the Business Post.

Rick Astley still a Christmas hit for UK advertisers

Advertisers are not giving up on 1980s idol Rick Astley, nor the likes of Graham Norton and Christina Aguilera, even while their TV spending slumps £150 million (€174.5 million), according to The Observer.

The British newspaper reports that TV ads are getting the Grinch treatment, with fourth-quarter spending likely to fall to £1.89 billion this year from £2.04 billion in 2022.

Even so, supermarket chain Sainsbury’s has recruited Astley to front its seasonal campaign, while Norton steps in for its rival Waitrose, and Aguilera stars for take away delivery group, Just Eat.

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