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Banks now required to tell mortgage holders how to save

Irish banks are now required to give mortgage customers more information about their loan in order to help them save money by moving to a better rate or switching provider.

This includes flagging in advance with borrowers when their fixed-rate term is coming to an end, and letting them know of better mortgage options that are available to them.

The requirements are part of changes to the Central Bank’s Consumer Protection Code on mortgages.

Head of Communications with price comparison website Daragh Cassidy said the changes are “good news for mortgage holders” and it will be much easier for them to switch provider in future.

“The mortgage-switching process is going to be more streamlined and standardised and also it’s going to improve the level of communications between banks and customers.

“There will be an onus on banks to let customers know if they can get a better rate with the bank, because quite often when we ask people why they don’t switch mortgage, one of the reasons is that it’s too complex.

“Also, customers just don’t know that they actually could save money, so these changes will help to address that.”

However, Mr Cassidy points out that banks will not be required to tell customers of better rates available at competitor banks.

Lenders are now required to let customers know at least 60 days in advance that they’re about to come off a fixed interest rate and to provide details of the new rate that’ll apply from the expiry date.

Banks will also have to provide mortgage holders with information on other possible options that may be available to them.

For consumers on a variable rate mortgage (other than a tracker rate), lenders are now also required to notify mortgage holders every year as to whether they could get a cheaper interest rate as a result of a change in their loan-to-value ratio.

Mr Cassidy says significant savings can be made if consumers switch their mortgage providers.

“Your mortgage is likely to be one of the largest household bills that you’ll ever have so the amount that you can save by switching is quite large.

“If someone had let’s say a €250,000 mortgage … if they were paying 4.3% at the moment, which is quite a standard rate, and they were to switch to the lowest interest that’s on offer at the moment, they’d save €250 a month.”

The changes, originally announced in June, follow research by the Central Bank back in 2015 which found over one fifth of borrowers could save money by switching their mortgage, yet few do so.

The updated Consumer Protection Code seems to be largely designed to encourage more of us to switch our mortgage provider – something we are traditionally very bad at doing.

According to the Head of Communications, “the level of mortgage switching is chronically low at the moment, it’s less than 1%.

“Around 400-500 people switch mortgage provider every month, that’s well below where it should be.

“Given that mortgages are more complex financial products, we’re never going to see the level of mortgage switching that we do see for example in gas or electricity, but certainly it should be far higher than it is.”

On whether there is a rule of thumb as to how often mortgage holders should be looking at switching in order to save the most, Daragh Cassidy says “if you look at a mortgage it’s going to last you for 20 or 30 years. It’s crazy to think that you wouldn’t switch at least once during that time period.”

He added switching does take a little bit of time and there are some upfront costs, but “if everyone was to switch mortgage at least once during the term of their mortgage, they would be doing well”.

On the upfront costs to switch, Mr Cassidy says some lenders will give you money towards your legal fees or offer cashback on your mortgage, which can help to offset these costs.

The changes also introduce a required ten-day turnaround for a decision on a fully completed mortgage application and for the lender’s switching pack to include standardised, prescribed information.

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NAMA generated €3.3 billion in cash in 2018

NAMA generated €3.3 billion in cash in 2018, according to an end of year summary of the agency’s progress.

It said its Residential Delivery funding programme continued to deliver new homes in Ireland throughout the year, and it is estimated that 9,700 units have been delivered through NAMA funding between 2014 and 2018.

Since its inception, the agency has generated cash of €44 billion from its operations.

Profit for the first half of 2018 showed a year-on-year increase of 44% notwithstanding the reduced size of NAMA’s loan portfolio.

Based on prevailing market conditions, the agency continues to expect to return a surplus of €3.5 billion to the Exchequer by the time it completes its work.

Following the final repayment of its €30.2 billion senior guaranteed debt in 2017, NAMA commenced the redemption of its €1.6 billion subordinated debt in April 2018. To end-2018, NAMA has redeemed more than €500 million of this subordinated debt.

According to the summary, NAMA expects that the remaining €1.06 billion will be redeemed, at latest, by the March 2020 first call date.

NAMA said its Residential Delivery funding programme has continued to deliver new homes in Ireland throughout 2018. It is estimated that 9,700 units have been delivered through NAMA funding between 2014 and end-2018. An additional 3,000 units are currently under construction or have had funding approved for construction. It said planning permission has been granted for a further 6,400 units on sites secured to NAMA.

The agency said major progress has been made on sites within the Dublin Docklands SDZ area with delivery strategies currently being implemented on 100% of the 15 sites in which NAMA originally had an interest. The SDZ area is twice the size of the original IFSC. Through NAMA initiatives, construction is complete on almost 1m square feet of commercial space and construction is underway on an additional 1.66m square feet of commercial space on formerly derelict sites in the Dublin Docklands area.

Since 2012, NAMA has delivered 2,475 houses and apartments for social housing, providing homes for an estimated 8,000 people. This is in addition to social housing provided under Part V arrangements on NAMA-funded residential developments.

To date, NAMA has invested approximately €350 million in remediating, completing and purchasing properties for social housing use.

Many social housing units remediated using funding from NAMA are situated in former unfinished housing estates. NAMA has completed the task of putting resolution strategies in place for all unfinished estates that remain in its portfolio. The total number of unfinished estates in the portfolio has reduced from 335 in 2010 to four at end-2018.

NAMA Chief Executive, Brendan McDonagh
“NAMA had another very successful year in 2018,” said Brendan McDonagh, Chief Executive. “We exceeded our deleveraging targets, generated €3.3 billion in cash, funded the completion of 2,500 residential units and delivered a substantial profit. We also facilitated further major progress in the development of the Dublin Docklands SDZ while achieving significant benefits for the State in further de-risking taxpayers’ exposure to the cost of developing the area.”

NAMA Chairman, Frank Daly
NAMA Chairman, Frank Daly, said, “At the end of 2018 it is salutary to recall the difficulties our country faced nine years ago when NAMA started its work at the end of 2009. The country has recovered significantly in the intervening period and it is encouraging for all who work in NAMA to recognise that, with many others, we played a real part in that recovery.”

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Tax take almost €1.4bn ahead of target in 2018

More than €55.5 billion was received by the Exchequer during 2018, according to the Department of Finance.

That is €1.38 billion (2.6%) more than had been expected, and €4.27 billion higher than the amount taken in during 2017.

The higher-than-anticipated tax take was due to a €1.9 billion (22.1%) excess in the amount of Corporation Tax received; with €10.4 billion taken in during the year.

VAT take was €144m (1%) higher than expected at €14.23 billion, while Capital Gains Tax and Capital Acquisitions Tax were also ahead of target.

However Income Tax was €203m (0.9%) behind expectations at €21.2 billion, with Stamp Duty €217m (13%) behind target at €1.45 billion.

Excise Duty, meanwhile, was €402m (6.9%) below forecast at €5.4 billion and, along with Motor Tax, was one of only two categories to fall year-on-year.

The better-than-expected tax take helped to push the Exchequer to a €106 million surplus for 2018 – despite an increase in Government spending.

According to the Department of Finance total net voted expenditure – which covers the bulk of departmental spend – was €810m (1.6%) ahead of target at €50.4 billion. This is also €4.15 billion (8.7%) higher than the 2017 spend.

At the same time total non-voted expenditure, which covers areas like Ireland’s contribution to the European Union budget, was €422m (4.1%) lower year-on-year at €9.76 billion.

“All major tax heads, except excise duties, are up year-on-year, reflecting the growing strength of the economy, while expenditure remains close to Budget day expectations,” said Minister for Finance, Public Expenditure and Reform Paschal Donohoe.

“This means that we are on track to exceed our fiscal targets for 2018, with today’s figures recording a small surplus.

“Any gains in 2018 against profile represent a positive development in terms of our potential to reduce our overall debt burden. We must continue to prioritise the reduction of debt, which in the event of a shock to our tax base, would assist our fiscal capacity to deal with such an occurrence, putting us in a stronger position to weather potential storms and ensure our economy remains resilient.”

KBC Bank Ireland chief economist Austin Hughes said the progress made on Ireland’s public finances were the result of “sustained hard work” but the 2018 surplus was “largely fortuitous”.

“It is probably best to emphasise a return to broad balance in the public finances in 2018 downplay rather than overstate the numerical significance of what is only a fractional surplus,” he said. “However, the broader significance of the turnaround in the Irish public finances through the past ten years is noteworthy.”

Business group Ibec welcomed the figures, but its economist Alison Wrynn warned about the increased reliance on Corporation Tax.

“To date, much of the volatility in corporation tax receipts was positive, but were it to move in the other direction, Government finances would be left very exposed as most of this unexpected revenue was used to finance unplanned supplementary estimates,” she said. “Any future surge in resources should be ring-fenced for one off capital projects as opposed to day-to-day spending.”

Peter Vale, tax partner at Grant Thornton, echoed this and said that last year’s performance should not be seen as an indicator of what is to come.

“Without the fallback of bumper corporate tax receipts, coupled with Brexit looming on the horizon, the position for 2019 is far from certain,” he said. “The corporate tax position itself is very dependent on returns from multinational corporations. While these remain robust, international tax developments remain fluid.

“While in our view Ireland is well positioned to continue to prosper in the new global tax environment, uncertainty remains and we have little control over how it will play out.”

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13.5% VAT rate in hospitality sector ‘will close restaurants’

The hospitality sector has called for a review of the increase in the VAT rate which comes into effect on New Year’s day.

The tax was lowered to 9% almost 8 years ago to help create jobs during the recession, and having achieved this, the Government opted to restore the rate to 13.5% during Budget 2019.

The lowest hourly wage that businesses are allowed to pay their workers is also going up by 25 cent to €9.80, from tomorrow.

Business people fear the moves will lead to some businesses closing or cutting jobs.

CEO of the Restaurants Association of Ireland Adrian Cummins said he expects a lot of closures in regional and rural Ireland.

“I think the Government didn’t take into consideration that Brexit is within 88 days now. It will have an effect on tourism, it will have an effect on border counties.

“The minister moved the VAT rate from 9%, which was the average VAT rate in Europe, to 13.5% which is the third highest in Europe. That doesn’t make us competitive.

“We need to review this immediately, in light of Brexit.”

Ruth Mulhern is owner-operator of Stef Hans, a café based in Thurles, Tipperary.

She and her husband, chef Stefan Matthia, ran the business for three and a half years, before taking the decision to close based on the rising costs

Speaking on RTÉ’s Morning Ireland, Ms Mulhern said, “I know there had been a huge amount of lobbying within the industry and there was a hope that maybe it would be 11%, and then we discovered it was going to be 13.5%.

“We realised that it was going to be pretty much unmanageable for reasonably new business such as ourselves.”

The café employs between seven and ten part-time and full-time staff.

“Initially when we looked at the figures, and we looked at that jump of 50% (VAT),” she said, “it just doesn’t make sense. Anyone who tries to do something for themselves seems to be punished, and that’s how we see this hike.”

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Changes to Consumer Protection Code come into effect

Changes to the Central Bank’s Consumer Protection Code, which aim to increase the levels of mortgage switching in Ireland and to provide greater levels of transparency for consumers, come into effect today.

The changes, which were announced in June, follow research by the Central Bank in 2015 which found over one fifth of borrowers could save money by switching their mortgage, yet few do so.

Among the changes, lenders are now required to let customers know at least 60 days in advance that they’re about to come off a fixed interest rate and to provide details of the new rate that will apply from the expiry date. Lenders will also have to provide mortgage holders with information on other possible options that may be available to them.

For consumers on a variable rate mortgage (other than a tracker rate), lenders are now required to notify mortgage holders every year as to whether they could get a cheaper interest rate as a result of a change in their loan-to-value ratio.

The changes also introduce a required 10-day turnaround for a decision on a fully completed mortgage application and for the lender’s switching pack to include standardised, prescribed information.

Commenting on the new changes, Daragh Cassidy, Head of Communications at price comparison and consumer website said that although the level of switching in the Irish mortgage market remains chronically low at less than 1%, “anything which facilitates switching is to be hugely welcomed”.

“Quite often we find that customers don’t bother trying to switch mortgage as they feel the process is too cumbersome and because they don’t realise the potential savings involved. These changes to the Consumer Protection Code should help to address that,” he said.

Outlining the savings to be made with switching, Mr Cassidy gave the example of a person who has a mortgage of €250,000, and paying a 4.3% standard variable rate could save over €250 a month, or over €3,000 a year, by switching to the cheapest rate on the market. “While there are some upfront costs associated with switching mortgage provider, in many cases banks will provide cashback to those who switch or a contribution towards the legal fees,” he said.

Mortgage holders who have been with their mortgage provider for a few years are encouraged to review their options and see whether they could save by switching to a better deal.

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Car sales fall for second consecutive year

New car sales were 4.4% lower last year when compared to 2017, according to figures from representative body SIMI, marking the second consecutive year of decline for the industry.

There were 125,557 new cars registered during 2018, 5,775 fewer than in the previous year. Compared to 2016, car registrations are 21,093 (14.4%) lower.

According to SIMI, there was a 7.8% rise in the number of imported used cars during 2018, pushing the figure to a record high of 100,755.

Of the new cars sold last year 54.4% were diesel, though that fuel type’s market share has fallen by more than ten percentage points in the past year alone.

Petrol-powered vehicles made up 38.5% of registrations, while petrol-electric hybrids continued to grow in popularity – rising to a 5.5% share of sales.

At the same time electric car sales almost doubled to 1,233 in 2018 – however they still made up less than 1% of registrations in the year.

Meanwhile the SIMI figures show that Volkswagen remained the most popular car brand in the year, taking almost 11% of all sales. Toyota remained the second most popular brand with 9.6% of sales, while Hyundai overtook Ford in third position.

Hyundai’s Tucson was still the most popular new model in Ireland, accounting for 3.2% of registrations. Nissan’s Qashqai became the second most popular model, having been in third place in 2017, while the Ford Focus moved from fifth to third.

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EU triggers plans for no-deal Brexit as Varadkar insists fall-out will not affect budget

EU triggers plan to protect EU citizens in the event of a no-deal Brexit
Plans cover 14 areas most likely to be affected, ranging from financial services to aviation, customs and carbon emissions trading
Irish Government prepares to publish its own no-deal contingency plans
Varadkar insists Brexit won’t affect budget plans

The European Commission has triggered an action plan to protect EU citizens and businesses from “major disruption” if the UK crashes out without a deal on March 29.

With just 100 days to go the scheduled date of Brexit, and the UK Parliament apparently far from ratifying Theresa May’s Withdrawal Agreement, the commission said it was “essential and urgent” to act.

Plans cover 14 areas most likely to be affected, ranging from financial services to aviation, customs and carbon emissions trading, and are designed to “protect the vital interests of the EU”.

The move came a day after the Cabinet agreed to implement in full the UK’s own preparations for a possible no-deal Brexit.

In a statement issued in Brussels, the commission stressed that the ratification of the November Withdrawal Agreement continues to be its “objective and priority”.

It said: “Irrespective of the scenario envisaged, the United Kingdom’s choice to leave the European Union will cause significant disruption.”

Measures being put in place would “limit the most significant damage” caused by a potential no-deal scenario but could not mitigate in full the impact of the UK leaving without an agreement, it said.

Read More: John Downing: ‘Uber-Brexiteers’ attacks on the Taoiseach will do him no harm’
It warned they would not “in any way compensate for the lack of stakeholder preparedness or replicate the full benefits of EU membership or the terms of any transition period, as provided for in the Withdrawal Agreement”.

Measures being undertaken now are “limited to specific areas where it is absolutely necessary to protect the vital interests of the EU” and will be “temporary in nature, limited in scope and adopted unilaterally by the EU”.

The commission urged EU27 states to take a “generous” approach to the rights of UK citizens in the EU following a no-deal Brexit, “provided that this approach is reciprocated by the UK”.

EU27 states should ensure UK citizens legally residing in the EU on the date of withdrawal will continue to be considered legal residents and should take a “pragmatic” approach to granting temporary residence status, it said.

UK nationals should be exempted from visa requirements, provided that all EU citizens are equally exempt from UK visas.

Remaining EU states should take “all possible steps” to protect social security rights of UK expats who have settled in their countries as well as their nationals living in Britain.

The commission announced “a limited number of contingency measures” to safeguard financial stability in the EU27 following a no-deal Brexit.

These include:

A 12-month equivalence decision ensuring there will be no immediate disruption in the central clearing of derivatives
A 24-month equivalence decision to avoid disruption in central depositaries services for EU operators currently using UK operators
Two 12-month regulations allowing the renewal of certain over-the-counter derivatives contracts
Temporary measures were adopted to avoid “full interruption” of air traffic between the EU and UK.

But the commission warned they will only ensure “basic connectivity” and “in no means replicate the significant advantages of membership of the Single European Sky”.

The statement said it was “essential” for EU27 states to make preparations to apply customs controls in relation to the UK in the case of a no-deal Brexit.

It said that from January 1, the UK’s involvement in elements of the carbon emissions trading system will be temporarily suspended, to ensure that an eventual no-deal Brexit does not disrupt its smooth functioning.

The commission proposed a regulation to allow the continuation of the EU’s Peace programme in Northern Ireland until the end of 2020 in the event of no deal.

Meanwhile, the British government has put 3,500 troops on standby to help deal with potential disruption caused by a no-deal Brexit.

The UK cabinet agreed to activate all its no-deal plans and advised the public to prepare for disruptions.

The contingency plans outline how the public will be urged to prepare themselves and their families over the Christmas holidays.

Television advertisement and social media are expected to be used to for public service announcements. Some 3,500 troops will be on standby to help deal with any disruptions, ranging from emergency engineering work to shortage of supplies such as medicines. UK government sources insisted they were not being put in place to deal with public disorder.

Businesses will receive a 100-plus page online package to help them get ready. Emails to 80,000 of the most likely to be affected companies will be sent over the next few days.

Leo Varadkar’s own proposals include ’45 items’ of fast-track legislation

It comes as the Irish Government prepares to publish its own no-deal contingency plans, which include proposals to have dozens of pieces of legislation passed by TDs in just 29 days.

Their plan could see all Dáil business set aside in order to facilitate the passage of legislation to ensure the continued payment of pensions and recognition of cross-border healthcare arrangements.

The Dáil breaks for almost a month today, returning on the same week that the British prime minister intends to finally put her Brexit deal to a vote in Westminster.

However, there is growing concern among Opposition parties here that there will not be enough time to adequately debate the ramifications of a no-deal scenario.

Taoiseach Leo Varadkar continues to insist Ireland is ready, but Labour Party leader Brendan Howlin questioned the level of detail made public.

“Is it envisaged we would pass 45 pieces of legislation in 29 days that are sight unseen at this stage?” he asked.

Mr Howlin demanded the Taoiseach provide a “comprehensive briefing” in advance of the recess so that TDs will be in a position to “scrutinise measures that might be necessary” over the holidays.

“I heard the British secretary of state for health say that he had become the biggest purchaser of fridges in the world as they stockpile medicines. That is how absurd things have become.

“We need to know specifically what we must do here to be ready for it and not be inundated by legislation we have not had time to reflect upon when we come back after the recess,” Mr Howlin said.

Fianna Fáil’s Lisa Chambers demanded a debate, saying all projections for Budget 2019 were based on an assumption that there would be a deal.

Mr Varadkar said there are “45 items” that will need to be dealt with – but they are not all primary legislation that will need Dáil approval.

“Some regulation, some statutory instrument and some primary legislation of it but also the non-legislative aspects of it,” he told the Dáil, adding he will ensure a full briefing is provided as soon as possible.

Speaking this morning, Mr Varadkar rejected charges by Fianna Fáil leader, Micheál Martin, that the Government was being unduly “secretive” about preparations for a no-deal Brexit.

Mr Martin insisted that he was by-passing the democratically elected parliament which he would soon be asking to put through special Brexit legislation. There was also a question of the Budget for next year having to be revised to take account of the need for extra investment.

“Do you have any respect for the Dáil at all?” the Fianna Fáil leader asked. He added that the Dáil Christmas break began today, and there would only be 29 Dáil sitting days next year before the Brexit deadline.

The Taoiseach said that he wanted to await the EU Commission’s plans for a no-deal Brexit.

He said Ireland’s plans must dovetail with these EU plans, and Irish plans would emerge tomorrow after a meeting with business and other groups concerned by Brexit.

But Mr Varadkar also repeated his statement of last Friday that even a no-deal Brexit would not cause a mini-Budget in spring 2019. He also again stressed that he believed a no-deal Brexit was “unlikely.”

The Taoiseach said the Budget presented on October 9 last was framed with Brexit economic fallout in mind. He said there would be a small budget surplus this year and a larger one next year, a “Rainy Day Fund” will set up next year, and there will be 25pc extra investment in transport, housing and other infrastructure projects.

“It is not intended that we would re-visit the Budget or introduce a mini-Budget,” Mr Varadkar insisted.

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Number of family home repossessions fall

The number of family homes being repossessed has fallen, with the improving economy helping to cut the number of mortgages in arrears.

New Central Bank figures show 191 homes were repossessed in July to September, down from 292 in April to June.

The vast bulk of the repossessions are carried out by banks, the figures show. Of the 191 homes taken in July to September, just 30 were done by “non-bank entities” – and not all of those are vulture funds.

It looks like the total number of repossessions this year will be well behind last year.

A Central Bank spokesman said 1,417 family homes were repossessed last year. For the first 9 months of this year, the number was 847.

The data showed the number of mortgages in arrears has continued to fall. At the end of September, 64,510 family home mortgages were in arrears, down 2.9pc compared to the end of June.

Finance Minister Paschal Donohoe said the figures showed progress was being made in dealing with “a tremendously difficult issue for families across the country”.

However, he admitted that more progress needs to be made “especially at a time when the economy is stable”.

The Minister said householders in trouble need to work with the Insolvency Service of Ireland.

“Through engagement with that organisation the majority of citizens who reach those arrangements end up staying their homes,” Mr Donohoe said.

“The banks and those in difficulty must continue to engage together.”

Despite the drop in arrears the number of mortgages in arrears for more than 720 days remained stubbornly high. Almost 28,000 family home mortgages are in that category, and they constitute around 90pc of all the arrears owed.

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Retailers blame ‘alarmist’ Met Éireann weather warnings for drop in footfall

Retailers have blamed “alarmist” Met Eireann weather warnings for deterring people from hitting the high streets to do their Christmas shopping.

Industry representative group Retail Excellence Ireland (REI) said trading over the Christmas period had been challenging.

“It very much looks like the Irish Retail Industry will trade on par with Christmas 2017, at best,” the group said.

However, Met Eireann has strongly defended its position stating it issues warnings for public safety, and they are based “on the best scientific evidence available at the time”.

The row has kicked off as online shopping has been growing rapidly – and that’s hitting Irish retailers with 70pc of online spend going to foreign businesses.

The rise of Black Friday and Cyber Monday, discount events held before Christmas, has further encouraged shoppers to go online, REI said.

“Footfall in November is reported to have declined by as much as 5pc like for like as Irish consumers decided to shop online rather than visit the high street. Black Friday has had a very detrimental impact on general footfall and retail sales in the weeks before and after the event. Footfall recovered in December but hit the buffers last weekend as weather warnings kept shoppers at home.

“The Irish retail industry has never experienced such volatility. It is impossible to predict what each given week will bring.”

Group Chief Executive, Retail Excellence, David Fitzsimons, added: “The most common comment from retailers is that the weather alert issued by Met Éireann pertaining to weather conditions last Saturday was at best alarmist.

“Most of the country experienced rain and some wind and yet the alert more or less turned off the spending tap, on one of the most important days in the retail calendar.

“We very much hope that the lost spend will make its way into our members tills in the coming days. Met Éireann need to be cognisant of the devasting impact such alerts have on consumer activity.”

However, Joan Blackburn of Met Éireann said warnings are based on scientific evidence available to Met Eireann, and they are continuously updated when required and they are up on their website directly.

She told “We issue warnings for public safety and for nothing else, on the best scientific information available to us at the time.

“The weather last Saturday was very bad. There was very heavy rainfall and there was strong wind. There was a potential for some extreme winds, which clipped parts of the south coast and some parts of southern coastal counties did experience some extreme winds.

“Everywhere experienced windy conditions and it was extremely wet. There was a lot of flooding around last Saturday as well.

“Our rainfall warnings were in operation for yellow rainfall and a yellow wind warning countrywide. They were upgraded to orange for wind for a short period in different areas during Saturday.

“It was communicated that it would be for a short period.

“The potentially for really extreme winds was there on Saturday,” she said.

Ms Blackburn added that public safety is part of the remit of Met Eireann.

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Former Anglo Irish Bank bondholders to be paid €267m by liquidators

A group of Anglo Irish Bank bondholders are set to be paid all of the €267m they are seeking from liquidators of the bust bank, despite the State only getting a fraction of the €30bn it invested as a rescue attempt.

The remains of Anglo are in the Irish Bank Resolution Corporation (IBRC), where liquidators are trying to salvage as much money for people to whom the bank owed money.

The State has got back around €600m so far, and is set to get another €600m shortly as the liquidators make another payment to creditors.

In a liquidation, some classes of creditors are paid before others, depending on how they came to be owed money. For example, employees owed wages will be ranked ahead of shareholders who took a risk to buy shares in the liquidated company.

The new payment will mean that a class of creditors called “unsecured creditors” will be paid in full.

That means that the next class in line for payment are Anglo “subordinated” bondholders, who bought a relatively risky type of the bank’s debt to try and make money.

After that €267m is paid, it’s expected the State will get more money back from Anglo, the Department of Finance said in a statement.

That money is interest payments owed to the State by Anglo on its debts.

But the vast bulk of the €30bn invested in Anglo by the State went on buying Anglo shares, and it’s unlikely the State will get any of that money back.

Shareholders are last in line to be paid out of the liquidation.

Paying bondholders has attracted fierce political controversy, given that the Irish taxpayer had to shoulder the burden of Anglo’s collapse. Sinn Fein TD Pearse Doherty said that paying the bondholders was “a betrayal of the Irish people”.

The State tried to get the Anglo subordinated bondholders to take a write down, but some rejected the payout on offer in that process. In some cases the Government tried to force bondholders to take a write down, but lost a court case brought by an investor who said they were entitled to pursue 100pc of their investment.

Once the bonds remained on IBRC’s books, the bank’s liquidators are obliged to pay creditors in order of seniority.

No timeframe has yet been given for when the bondholders might receive the money.

The liquidation of IBRC, led by Kieran Wallace and Eamonn Richardson of KMPG, had by the end of last year seen almost €250m paid out in professional fees. Finance Minister Paschal Donohoe has said he will use the €1.2bn received by the State to reduce Exchequer borrowing.

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