Syndicated Archives - Page 4 of 252 - Devine Accountants

New law aims to protect workers in casual employment

A new law to protect workers in casual and precarious employment comes into effect today, aimed at improving the security and predictability of working hours.

A “band of hours” system is being introduced where an employee’s contract does not reflect actual hours worked.

Under the legislation, a worker is now entitled to be placed on a band of hours that reflects the hours they have actually worked over a 12-month reference period, rather than the hours outlined in the employee’s contract of employment.

There are restrictions on zero hour contracts, under which employees must be available for work but are not guaranteed hours, except in circumstances of genuine casual employment or where cover is being provided in an emergency situation.

There are also now minimum payments for people called into work but are sent home without work, while employers will also have to give employees their core terms of employment within five days of being hired, such as the number of hours the employer reasonably expects the employee to work per day and per week.

The measures are contained in the Employment (Miscellaneous Provisions) Act, which is designed to address what the Government describes as “the challenges of increased casualisation of work and to strengthen the regulation of precarious employment.”

There are also strong anti-penalisation provisions for employees who invoke their rights under the legislation.

Under the new Act, the national minimum wage rates for young employees have been simplified and based on age, with trainee rates of pay abolished.

A person aged under-18 will be entitled to a rate of €6.86 per hour and €7.84 for an employee aged over 18.

Once a person turns 20, they will have to be paid the full national minimum wage of €9.80 per hour.

Minister for Employment Affairs and Social Protection Regina Doherty said: “From today, this new law will profoundly improve the security and predictability of working hours for employees on insecure contracts”.

The minister said the law “is rooted in a foundation of extensive consultation and, as a result, this is a balanced and fair measure for both employees and employers which is designed to work effectively in practice”.

She added: “In a changing world, this reform ensures that the available legal protections will match the conditions experienced by a modern workforce and make a real difference in the lives of thousands of workers.”

There has been a mixed reaction to the new legislation from unions and employer groups.

General Secretary of the Mandate Trade Union John Douglas said the measures are “hugely significant.”

He said it will make “a massive difference for tens of thousands of low paid workers on precarious contracts in the retail sector, the hospitality sector and in the contract cleaning sector.”

He says the new laws will benefit a lot of women in particular.

Director of Employer Relations at the Irish Business and Employers Confederation said “the key issue is the unintended consequences” that may flow from the measures.

Maeve McElwee added that “it will certainly regulate a very small segment of our labour market, but that regulation in itself will undoubtedly cut off opportunities for other people to be able to flex their working time.”

Both employees and employers are now being urged to familiarise themselves with their rights and responsibilities under the new legislation.

Workers with grievances can take their issues to the Workplace Relations Commission for adjudication, without any fear of being penalised.

Article Source: http://tinyurl.com/kbwqb42

More Corporation Tax than expected in February’s Exchequer returns

Exchequer returns for February show a shortfall in Income Tax and VAT receipts, but these are largely offset by a bigger than expected payments of Corporation Tax.

In February, €1.6 billion in income tax was collected, which was €156 million lower than expected.

The Department of Finance says this is mainly due to some late payments of tax and to lower than expected payments of tax on unearned income.

VAT was €103 million below target, but February is not a “VAT due” month. The department says there was also a lot of VAT refunds paid out during the month.

February is not an important month for Corporation Tax, but the tax brought in much more money than expected – €272 million, which is €194 million more than expected.

Excise duty was €11m lower than expected and Stamp Duty €9 million below target.

Overall, the cumulative tax take for the first two months of the year is below target by just €50 million or 0.6%. This is still 3.7% higher than the same period last year.

Spending in the year to date was €7.9 billion, an increase of 8.1% compared to the same period last year.

Article Source: http://tinyurl.com/kbwqb42

Irish businesses now stockpiling raw materials ahead of Brexit date

The clearest evidence yet has emerged of stockpiling by Irish businesses ahead of Brexit in the latest evidence of how the UK’s planned exit from the EU is hitting Irish industry.

With 27 days to go before Brexit, Irish manufacturers have increased stocks of raw material at a record pace, according to the latest Manufacturing Purchasing Managers Index (PMI) from AIB.

Separately, new figures from the Revenue Commissioners show a nearly seven-fold increase since the start of the year in the number of Irish companies applying for key customs registrations needed to trade with the UK, after it leaves the EU Single Market.

The number of applications for an Economic Operators Registration and Identification (EORI) number increased to 2,617 by the end of the week from 384 at the start of January. It compared to 2,976 applications for all of 2018.

Having an EORI number for customs and excise is the minimum requirement for businesses to be able to move goods in and out of the EU customs area.

In the last seven days, 416 businesses have applied for the EORI customs registration. Stockpiling materials ties up business capital but it is a protection against any disruptions to supply chains that will happen if the UK crashes out of the European Union without a deal on March 29.

The latest evidence for Ireland tallies with comments late last month by Gene Murtagh, the chief executive of Irish insulation giant Kingspan, who told the Irish Independent that companies in the UK had been stockpiling ingredients, raw materials and other goods.

“Pretty much every warehouse in the country (the UK) is full,” he said.

While Irish manufacturing businesses are stockpiling materials, many firms are delaying more long-term investment.

The heads of Bank of Ireland and AIB also both said this week that they have seen evidence of investment decisions being delayed by their small and medium enterprise (SME) customers, until there’s clarity on what form Brexit will take.

Overall, the PMI Index shows manufacturing activity in robust condition in Ireland.

The PMI index was created to provide a single-figure reading for conditions in a sector on a scale either side of 50, where numbers up from 50 show growth and down from 50 chart decline.

The Irish manufacturing PMI posted 54 in February, up from 52.6 at the start of 2019.

Action to mitigate supply chain disruptions are the main Brexit effect in evidence in February.

AIB chief economist Oliver Mangan, said: “The impact of Brexit was evident in many of the components of the PMI as some firms moved to take action to avoid possible disruption to supply chains.

“Some firms also reported rising demand from the UK ahead of Brexit,” he said.

It shows preproduction inventories increased at the fastest rate in the near 21-year PMI history. Stocks rose in 11 of the past 12 months.

A number of panellists surveyed for the Index said they had brought forward purchases in order to secure raw materials in case of any stock problems due to Brexit, although some companies had raised their buying activity due to stronger customer demand.

However, the AIB’s Oliver Mangan added that uncertainty about Brexit saw business optimism slip to its lowest level in 18 months.

Article Source: http://tinyurl.com/kbwqb42

‘We are the champions: business lessons courtesy of Freddie Mercury’

Interest in rock band Queen has enjoyed a renaissance recent months.

People above a certain age are talking about them again and humming their iconic songs. The newly-released Bohemian Rhapsody movie has put the band back on our radar in a big way. I must confess, I had forgotten about many of its greatest hits and I’m thoroughly enjoying the nostalgia that goes with it all.

I was on a long-haul flight this week and the film popped up on the menu in front of me.

With Freddie Mercury being played by Oscar-winner Rami Malek, I was engrossed for the full two hours and 13 minutes. Now I won’t attempt to critique it, but I will say that I thoroughly enjoyed it. I found it inspiring, funny, and really quite emotional.

The band was initially called Smile and the four original members were playing the pubs and clubs circuit, but with limited success.

When the lead singer left the band, it opened up a place for flamboyant Farrokh Bulsara, born in Tanzania to Indian parents, to join the band.

Farrokh adopted the English name Freddie and later became Freddie Mercury. And as you know, the rest is a history of amazing musical success, personal tragedy and a fantastic legacy of great hits from these four business partners.

The Business Challenge with Partnerships
When Freddie joined and brought his style, his voice and his creativity, the band became a well-functioning unit. Each member had a clearly defined role. There was a lead guitarist, a bassist, a drummer and a lead singer. Unlike most organisations, their individual roles were very clear and there was no ambiguity.

Even when it came to song-writing, each one’s talent was respected and they each had a go at it. After a few years of global fame, Freddie was encouraged to leave the band and launch a solo career.

Although it didn’t work out, he was subsequently welcomed back to the band — just like the ‘prodigal son’. There was, of course, lots of sulking and raised voices but the three members were very grown-up about it all. Very soon they were back to rehearsals for the famous Live Aid concert, the crescendo of that phase of their career with Freddie.

Partnerships between friends in business can be very challenging. Art in this case imitates real life as our country is full of SME partnerships that were built on great ideas and ambitions. But they don’t all work out.

I know of one organisation that is owned and run by two people who never speak to each other at all. They operate their business and communicate exclusively through their accountant.

Can you imagine the lost opportunities that go hand in hand with that scenario? Not to mention the personal stress and risk to the business. I have no idea what caused the rift in the first place but, whatever the reason, it’s bad for business.

Tips to Make a Partnership Work
You may be starting out on a new venture with some colleagues. Or you may already be up and running as a business partnership. Is there room for improvement in how you work together? If so it might be a good idea now to renew your vows!

1 Revisit your north star and ask yourselves… why are you in business? What business legacy do you want to leave behind when you move on? That question will help to get grounded once again.

2 Consider the values or principles that you all hold dear. Undoubtedly, you’ll include respect, integrity, honesty, etc. But expand those words into examples of where they apply in your business. This will help you check in on your culture and bring the behaviours that are expected and accepted to the fore.

3 Shape the most appropriate structure to ensure you deliver your strategy. Start with empty boxes in an organisation chart and profile the required role in each box. Then match up each partner to the best position — and clarify their roles and responsibilities.

That exercise might reveal the need for changes to how you currently operate. But if you use your north star as your guide, that will make those decisions a lot easier.

The Last Word
I know it’s a cliche, but communication is central to the success of any partnership. It’s not easy, particularly when relationships go off track. But remind yourself that there is too much to lose by allowing ambiguity to prevail.

In the Coronal Travel case study below, Darragh and Shane are in business together for four years although they know each other a lot longer than that. They assure me that they do take time out to discuss their roles and relationship. If they can keep that up, that’s a recipe for a successful partnership.

Now I do appreciate that these conversations can be awkward, but that will only apply to the first one. An objective facilitator would guide you through this process.

Article Source: http://tinyurl.com/kbwqb42

Is there any tax relief available if I rent a room to a student?

Question: I am thinking of opening up a room in my home to a student as digs. Is there any tax relief available for this, and I am wondering whether or not renting a room will have any impact on my mortgage interest relief?

Answer: Given the housing situation at the moment choosing to take in a lodger or student could be a smart move. In terms of tax relief, there is a scheme designed especially for this avenue of income – it’s called rent-a-room relief, according to Eileen Devereux, commercial director at Taxback.com.

The scheme enables you to earn up to €14,000 gross income before paying any tax on income received for the room in your home.

The gross income is the total income before you deduct expenses, which may include money spent on the maintenance of the room, as well as any permissible capital allowances due on fixtures and fittings.

Mortgage interest relief is not affected by the receipt of income exempted from tax under the rent-a-room relief scheme, Ms Devereux added.

There are some important conditions. The home must be your primary and sole residence during the year of assessment. You also cannot let the room to direct family, or a partner, or to an employee or employer under the scheme. The room must also be rented on a long-term basis, but the relief can apply to lettings used as residential accommodation for students in an academic year or term.

Question: I am 34, and while retirement seems pretty far off yet, I am thinking about starting a pension. I have an income of €42,000 a year at the moment, and there’s plenty of scope for moving up the ladder within my particular field of software development. It seems like the right time to get saving. I am trying to work out how much I would need to save to have enough to live on when I am older. Is there an average amount to save?

Answer: A basic rule of thumb when calculating what you will need is to try and work out how much of your current salary you could live on if you were not getting that salary, according to the chief executive of the Irish Association of Pension Funds Jerry Moriarty.

Take account of expenses that might not be relevant in the future, for example, a mortgage that’s likely to be paid off. People often base what they need on 50pc to 75pc of their final salary, but in reality, most people manage to get by most of their life on much less than half of their final salary, Mr Moriarty says.

Another rule of thumb is to save 10pc to 15pc of your salary each month, which is a good average contribution rate.

It is worth checking out whether your employer has a pension scheme in place. If there is one, Mr Moriarty recommends signing up to avail of a valuable boost to your contributions as the employer will also pay in and usually cover some of the costs. The earlier you start a pension, the more benefit you get from investment and the better the return due to compound interest, and in fact saving a small amount of money early is much better than saving twice that much later.

The Pensions Authority’s website (pensionsauthority.ie) has a calculator that allows you to estimate what you should be paying if you can work out what you need in retirement.

Question: My wife and I are in our late 50s and we are becoming increasingly concerned about the security of our pension investments given Brexit, Trump, trade wars etc. We are quite exposed to stock and property markets. My wife has suggested we look at gold. What is the safest way to diversify into gold?

Answer: There are a few ways to invest in gold including gold exchange traded funds (ETFs) and investing in physical gold. Gold ETFs are a good way to get exposure to gold and the gold price in the short term, according to director of Dublin-based Goldcore Mark O’Byrne.

There is a degree of risk given the investor owns shares in a trust and is an unsecured creditor with counter-party risk to the providers. ETFs can be bought through stockbrokers and there is normally an annual administration fee of between 0.4pc and 0.5pc.

Another way to invest in gold is to own physical coins and bars in a secure vault, Mr O’Byrne says. Allocated and segregated gold accounts ensure the investor has outright ownership. Gold is bought from a broker which will transfer the ownership of the gold to the investor or pension owner and allow them to own gold in safe vaults in Ireland and internationally. On a lump sum investment of €10,000, costs will be roughly 4pc to 5pc.

Investment grade gold is stamp duty and Vat-free but capital gains tax will apply if the gold appreciates in value.

Rent-a-room relief allows you to earn up to €14,000 gross income before paying any tax on income received for the room in your home.

The earlier you start a pension, the more benefit you will get from your investment and the better the return due to compound interest.

Article Source: http://tinyurl.com/kbwqb42

Insurance chief attacks slow pace of claim culture reform

There’s a “high risk” that insurance cost and claims reform will wither on the political agenda, according to FBD chief executive Fiona Muldoon.

She has blasted the snail’s pace of planned reforms but conceded that the strong set of full-year results posted by her stock market-listed insurance group yesterday does little to advance its cause in seeking reform.

The courts remain replete with cases where high awards have been made for relatively minor injuries, and also of claimants attempting to benefit financially from fraudulent claims.

“It is important that the industry, small businesses, motorists and all the people who are affected find a way to keep the Government focused on reform,” she told the Irish Independent. “That is the only way that you deliver a lasting change.”

It’s been two years since the Cost of Insurance Working Group delivered its report to government on the cost of motor insurance, and a year since its report on the cost of employer and public liability report was published.

While there have been some minor advances in tackling reform, Ms Muldoon said relatively very little has happened.

“We’re more than two years in,” she said. “There’s been more heat than light, an awful lot of talking and reporting and not that much by way of actual substantive change. In some respects, the average customer has gotten used to the increased prices. That means the political agenda has moved on slightly.”

She said that “most noise” and the “most pain” is currently in the SME sector, where businesses are finding it difficult in a low-inflation economy to carry price increases.

Ms Muldoon said reform needs “political will”. However, she said that a minority government doesn’t help that, and that wide-scale engagement with the judiciary is a place where the Government is “slow to go”.

FBD said that there had been “more moderate” inflation in claims during 2018, but said the overall cost of claims is still high. Its net claims totalled €183.4m last year, compared to €203.1m in 2017. The net cost to FBD of Storm Emma last year was €6.6m.

The insurance boss was speaking as FBD said it made a pre-tax profit of just over €50m in 2018, slightly more than the €49.7m it reported in 2017.

However, excluding an €11.8m charge FBD shouldered as it redeemed a €70m convertible bond that had been issued to Canadian financial group Fairfax, its pre-tax profit level would have been 24pc ahead.

FBD’s gross written premiums dipped by €1m to €371.5m. Its combined operating ratio – a key indicator of profitability – hit 81.2pc in 2018, compared to 86.2pc in 2017. The lower the figure below 100pc, the more profitable the firm is.

The company’s annualised total investment return from its just over €1bn in assets fell into negative territory in 2018, at -0.5pc.

That’s down to a tough investment environment, where FBD has 48pc of its investment assets in corporate bonds, 29pc in government bonds and 14pc in cash. FBD, as with other insurers, invests policy money that is held to cover claims. But the annualised rate of return on its investments has steadily fallen in recent years. Last year, the figure was 1.2pc.

It was hit in 2018 by widening spreads in the corporate and eurozone bond portfolio, and particularly eurozone bonds in Italy. It reduced its exposure to Italy by €15m during 2018. FBD increased its exposure to risk assets in 2018 by €33m to €55m.

It is still in the process of selling a legacy investment property in Dublin’s IFSC.

Article Source: http://tinyurl.com/kbwqb42

Surge in number of data breaches reported to Commission in 2018

The number of data breaches reported to the Data Protection Commission soared by 70% last year, as new data protection rules were introduced across Europe.

In total, the watchdog was notified of 4,740 breaches during 2018, with 3,542 of those lodged in the seven months after the General Data Protection Regulation came into force in May.

The volume of complaints made to the regulator also jumped by over 50% last year to 4,113, with 2,864 of those coming after the GDPR’s commencement on 25 May.

The largest number of these complaints related to the right of access to personal data held by others, with unfair processing of data and disclosure among the other biggest categories.

“The rise in the number of complaints and queries demonstrates a new level of mobilisation to action on the part of individuals to tackle what they see as misuse or failure to adequately explain what is being done with their data,” said Data Protection Commissioner Helen Dixon.

The figures are contained in the first annual report of the organisation since it changed from being the Office of the Data Protection Commissioner to the DPC in the middle of last year.

The body also opened 15 statutory investigations between May and December last year into issues around whether large technology multinationals were compliant with GDPR.

Seven of those are focused on Facebook alone, with two looking at its sister company WhatsApp and one examining an issue with Instagram, which is also owned by the social networking giant.

Twitter and Apple are also the subject of two ongoing inquiries each, while LinkedIn is the focus of one.

“All these inquiries should reach the decision and adjudication stage later this year, and it’s our intention that the analysis and conclusions in the context of those inquiries will provide precedents for better implementation of the principles of the GDPR across key aspects of internet and ad tech services,” Ms Dixon said in her report.

GDPR also introduced a one-stop-shop mechanism to allow companies operating in multiple EU countries to be overseen by a single regulator in just one.

Over the period examined by the annual report, 136 cross-border processing complaints were received by the DPC using this new system of governance.

GDPR also made it mandatory for organisations here to report data breaches to the DPC and this change is reflected in the surge of cases notified to the authority in the second half of the year.

“While it would be an ideal world if there were fewer, the DPC’s experience generally is that most organisations engage with the DPC and accept our guidance around mitigating losses for affected individuals, communicating any high risks to them and learning lessons from the breach to avoid a repeat,” Ms Dixon wrote in the report.

The DPC also initiated 31 inquiries itself under the Data Protection Act 2018 into the surveillance of citizens by the State sector for law enforcement purposes in public spaces.

These probes will examine a range of technologies, including body-warn cameras, drones, CCTV and systems that use automatic number-plate recognition (ANPR).

The first module is focusing on the 31 local authorities and the second will look at An Garda Síochána, with more to follow.

A special investigation into the State’s Public Services Card also continued during the period.

Electronic direct marketing continues to be a problem area for many people, according to the report, with 32 new complaints investigated over the course of the seven months.

The biggest culprit was email marketing, accounting for 18 of these complaints, followed by SMS marketing (11) and telephone marketing (3).

However, a number of these inquiries led to charges being brought under the E-Privacy Regulations, with five successful prosecutions for a total of 30 offences secured in the District Court.

The DPC also handled 48 data-breach complaints from affected data subjects during the period, with most cases concerning the personal data of an individual being issued to another third party in error.

The number of cyber security compromises notified also rose again last year, with the number of notifications increasing sharply from 49 cases in 2017 to 225 in 2018.

Cases included phishing, malware and ransomware attacks with an increase in the use of social engineering and phishing attacks to gain access to the ICT systems of controllers and processors also recorded.

“It is notable that many of the data breaches notified to the DPC involving a risk to financial data resulted from compromised or stolen credentials,” the report said.

“In relation to the public-sector breaches notified to the DPC, it is of particular concern that a large number involved special categories of personal data or data relating to criminal convictions or offences.”

The report also outlines how late last year a project began to examine the processing of children’s person data and their rights as data subjects under GDPR, with a public consultation on the issue open until tomorrow.

Staff numbers at the DPC continued to grow alongside the workload between May and December, with 135 now employed at the commission and 30 more set to join this year.

Funding for the DPC has risen from €1.7 million in 2013 to €11.6 million in 2018.

“Although we are still in the stage of having to bust some myths and misunderstandings that have built up around the GDPR, we feel very optimistic about the improvements we will see in Ireland in personal-data-handling practices over the next few years,” Ms Dixon said.

Article Source: http://tinyurl.com/kbwqb42

EU agrees measures to tighten oversight of foreign finance firms

European Union governments and lawmakers have reached agreement on tighter rules for asset managers and investment firms offering “bank-like” services, such as proprietary trading and underwriting of financial instruments.

The agreement will give the European Commission more power in overseeing foreign financial firms operating in the EU, including more clout over London-based financial firms after Britain leaves the EU.

The overhaul also imposes stricter liquidity and capital requirements on large EU investment firms, partly tightening an initial proposal put forward in 2017.

“The agreement further strengthens the equivalence regime that would apply to third-country investment firms,” the EU said in a statement. The Commission will also get more power to assess whether foreign rules are compatible with EU regulations.

More than half of the 6,000 European investment firms have their EU headquarters in the UK, although many have taken steps to remain in the EU after Brexit by setting up offices elsewhere.

Article Source: http://tinyurl.com/kbwqb42

Electric Ireland to increase electricity and gas prices by 4% from April

Electric Ireland customers have become the latest to feel the pain of price hikes after the largest provider in the State announced its intention to increase residential electricity and gas prices by 4 per cent from the beginning of April.

It is the second price increase from Electric Ireland in just more than six months after it increased prices by 6.2 per cent for electricity and 8 per cent for gas last August. The company is the retail arm of State-owned energy group ESB.

All the leading providers have increased their prices over the past 12 months with most hitting consumers more than once. All of them have blamed climbing wholesale energy prices for the increases and Electric Ireland was no exception.

“Electric Ireland is absolutely committed to keeping energy prices as low as possible,” claimed Electric Ireland’s executive director Marguerite Sayers.

She noted that the company did not increase its prices during the winter months “when energy consumption is at its highest and people have the added financial pressure of Christmas”, a move she said that had resulted in a total saving of €21 million for customers.

“However, against the backdrop of much higher wholesale energy costs, we now reluctantly have to pass on some of these higher costs to our customers from April 1st, 2019.

Average increases
The 4 per cent increase will cost its customers around €3.20 per month on average for electricity based on typical residential usage, and gas customers €2.49 per month on average.

Electric Ireland currently has more than 1.1 million electricity customers and almost 140,000 gas customers according to latest figures from the Commission for Regulation of Utilities.

Earlier this month, Bord Gáis Energy announced similar price increases which kick in on March 10th.

“Last November, Electric Ireland promised to freeze its prices over the winter months when many of its competitors had already increased theirs, so there was an inevitability about today’s announcement,” said Daragh Cassidy of price comparison website bonkers.ie.

Article Source: http://tinyurl.com/kbwqb42

Permanent TSB’s 2018 profits jump 45% on increased market share

Permanent TSB has reported a 45% jump in pre-tax profits, before exceptionals, for 2018 as its total new lending volumes increased by over 40%.

The bank said its pre-tax profits, before exceptionals, climbed to €94m, while its total new lending volumes amounted to €1.5 billion.

It said its non-performing loans reduced by 68% from €5.3 billion in 2017 to €1.7 billion in 2018 and its NPL ratio now stands at 10% from 26% at the end of 2017.

This is still below the European average, however.

Permanent TSB said its NPL ratio is expected to continue to reduce towards a “mid-single” digit in the medium term.

The bank completed two controversial loan sales – Projects Glas and Glenbeigh – which related to more than 16,000 mortgages during the year.

Permanent TSB, which is still 75% owned by the state, said it now has a 15.1% share of the residential mortgage market, up from 12.6% in 2017.

The lender’s net interest margin – the difference between the average rate at which it funds itself and lends on to customers – fell marginally to 1.78% from 1.8%.

The bank’s chief executive Jeremy Masding said that as the bank moves into 2019, notwithstanding the geopolitical uncertainties mainly caused by Brexit, it remains positive.

“We believe we have a clear vision and strategy, and we are on the right path towards building an organisational culture that will deliver sustainable shareholder value and right customer outcomes,” Mr Masding said.

Permanent TSB said it will invest savings from non-recurring projects into improving its digital business, a plan that analysts said will slow earnings recovery at the lender.

The bank said its operating expenses are expected to remain broadly flat again this year.

It outlined plans to use savings to improve its digital offering and infrastructure and catch up with larger rivals Bank of Ireland and AIB, who have embarked on major investment projects.

Analysts at Davy Stockbrokers said in a note that the digital investment – together with the lower European Central Bank interest rate outlook – would slow the bank’s earnings recovery.

The chief executive of Permanent TSB has expressed concern about legislation being proposed by Sinn Fein that would require customer consent before mortgages could be sold to so-called ‘vulture funds’.

Jeremy Masding said the bank is a regulated business and continues to work within the regulated framework. But he said any changes to that environment would have to be done with care.

“Interventions like that need to be thought about very carefully in terms of the long-term consequences, for both the customers, but also for the ability of banks to operate a functioning business model,” he told RTE News.

“I just hope the debates are done in a holistic sense.”

Mr Masding also urged caution around Fianna Fáil proposals that would impose a cap on variable mortgage rates.

“Intervention in the capital markets, interventions in the banking business model is something that needs to be thought about very, very carefully because I always worry about the unintended consequences,” he said.

“For example the confidence of the capital markets in Ireland, our ability to raise funding, our ability to source capital, and if that is curtailed the knock-on impact for new customers is actually something we all need to be very cognisant of.”

In relation to whether he expects interest rates to begin rising soon, Mr Masding would not be drawn.

“We are a play on interest rates, and eventually interest rates will begin to rise. I don’t have a crystal ball as to when that will happen, but when it does PTSB is very positively leveraged to a rise in interest rates,” the CEO added.

“We keep our rates under constant review. For me the key principle is I just want to make sure we are providing compelling propositions for customers.

“So instead we are giving customers a choice, because as you know it is very important that there is competition in the retail banking space and we are providing that,” he added.

Asked if he thought the cap on banking executive’s pay should be lifted, Mr Masding said there is a need for a modern reward system so that the bank can compete for the very best people.

“It certainly creates an operational risk for a covered bank such as Permanent TSB. It would be fair to say that retention is a challenge and I think it would certainly help me enormously if there was a modern reward system, but with the appropriate controls because we can’t have the sort of risk frameworks that led to the collapse of the Irish banking system.”

Mr Masding also said that there had been no increase in the number of customers it had identified as being impacted by the tracker controversy.

He said 1,983 customers had been offered redress and compensation, 5% of the 40,000 across the banking industry.

He added that this was 5% too many.

“We continue to build our risk and control environment to make sure our mindset is about right customer outcomes, because something like that should never happen again,” he said.

He also said he expects the bank will be fined by the Central Bank over the tracker mortgage issue.

Regarding Brexit, the PTSB chief executive said the bank has a business model which is focused on the Republic of Ireland.

As a result, he predicted that the immediate impact would pass the bank, and that it may be impacted instead by the second wave.

He added that the bank is taking contingency measures and is staying in close contact with customers to make sure it can help them where it can.

Mr Masding also did not rule out further job cuts at the bank, where the numbers of employees have fallen by 250 as part of the restructuring.

The CEO said the banks has to continue to manage its cost base and will continue to evolve its business model over time and that would include considering the right mix of labour.

Article Source: http://tinyurl.com/kbwqb42