Latest IBF Mortgage Approvals Figures Published

The latest figures from the IBF Mortgage Approvals Report, published by the Irish Banking Federation (IBF), show that 1,776 mortgages to the value of €297 million were approved by lenders here during the month of August.

The following are the key elements

  • A total of 1,776 mortgages were approved in August, of which 1,637 (92%) were for house purchase.
  • The number of mortgages approved increased by 11.1% on an annual basis (from August 2012) and fell by 5.3% on a monthly basis (from July 2013).
  • The value of mortgages approved in August was €297m, of which €283m (95%) was for house purchase.
  • The value of mortgage approvals grew by 11.3% on an annual basis and fell by 8.5% month-on-month

The overall trend in mortgage approvals over recent years is presented in the following graph

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Data collection for the IBF Mortgage Approvals Report began in August 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The full report can be viewed here.

 

Note: The Irish Banking Federation (IBF) is the principal voice of the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Jillian Heffernan, Marketing Communications Manager, IBF, Ph: 01 4748835 / 087 9016880

Address by Eamonn Tuohy, Chairman, FIBI, at the Annual FIBI Conference, 17th September 2013

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Eamonn Tuohy, FIBI Chairman, delivering the opening address at this year’s FIBI conference in Dublin

Good morning Ladies and Gentlemen,

On behalf of the Federation of International Banks in Ireland (FIBI), I am very pleased to welcome you to our conference.  I am delighted by our conference theme, Supporting Growth for Ireland, and by the excellent array of speakers we have on hand to address this topic.  I expect to draw a great deal from today’s proceedings and I certainly hope that each of you will too.

The title of our first session, “Looking to the Future”, really captures what it is we’re aiming to achieve today: which is a sense of the likely future direction for the IFSC and for the country more widely as a location for international financial services.

In doing this, let us first briefly take stock of the current status of the international financial services sector in Ireland.  Despite the very significant challenges still facing us in the aftermath of the financial and economic crisis, the sector overall has shown itself to be relatively resilient.  A number of headline metrics confirm this.

Ireland still stands as the world’s sixth largest exporter of financial services and the seventh largest location for the issuing of international debt securities, for example. Financial services now account for over 40% of all foreign direct investment into Ireland and contribute some 11% of gross value added in the economy.  Furthermore, Dublin has maintained its classification as a Globally Diversified Financial Centre – the second highest category in the Global Financial Services Index; this is based on such factors as range of activities and substantial presence of investment banking activities.

At the same time, we must have regard to global trends.  These clearly show that the banking sector is still going through a period of retrenchment. There is much greater involvement by government in our sector, and regulation at a global level is seeking to shape a smaller banking sector.  This inevitably leads to consolidation, a reduction in the number of regulated entities, greater centralisation of control, an increased focus on high quality liquid assets, and a drive to reduce operating costs.  As small subsidiaries and branches of foreign banks, FIBI members are seeing the impact of these trends at first hand on their own businesses.  The public at large can see this trend in the form of the number of banking licences which have been relinquished in Ireland recently.

Recent research among FIBI members about Ireland as a location for business provide what could best be described as a mixed bag – some good indicators and some less positive.  However, to focus first on the positive, Ireland’s performance relative to other jurisdictions is seen as improving, in respect of key variables such as labour market flexibility and the quality and availability of staff.  The following results are more positive still:

  • more than half of the responding banks foresee an improved business climate over the coming year – interestingly, none of them see it deteriorating;
  • just under half of them believe their own business activity will increase; and
  • almost a third of respondents expect the numbers they employ to increase – this follows an 8% increase in employment in Dublin in 2012.

On the negative side of the balance sheet, so to speak, concern is raised about Ireland’s reputation as a centre for financial services – principally a legacy of developments in the domestic banking sector.  Concerns also arise about our capacity to attract very high calibre people to locate here, as an enabler of further development and also about the costs of doing business.  With our comparatively high rates of personal tax, the SARP initiative is seen as potentially useful, but the belief is that its effectiveness can be improved, so as to make it a valuable lever to promote new, higher value activities.

However it is also worth noting that the positive signals in our sector come from the larger more diversified businesses, while the smaller, single activity banks are suffering under the business and regulatory pressures.

And so, we come back to the issue of regulation.  You might well ask when, if ever, does the financial sector not have some axe to grind about regulation?   However, the concern is not in respect of regulation per se.  In fact, strong and effective regulation is universally recognised and accepted as a positive feature of the Irish environment; and it has been used by our members, within their own organisations, to promote Ireland as a business centre.  Rather, the concern centres on the need for regulatory proportionality and regulatory consistency.  The following are a number of specific aspects of regulation which are most frequently raised in this regard and whose application might be improved without in any way reducing the substance of regulation and the effectiveness of the regulator:

  • shortening the lead time to securing decisions from the regulator
  • streamlining the fitness and probity tests
  • getting greater clarity from the regulator about what kinds of activity are likely to be acceptable/unacceptable
  • improved retention of staff at the Central Bank with the necessary experience and skills.

These aspects of regulation are of course in the sole remit of the regulator, just as government is responsible for the aspects of national policy in the areas of taxation and finance which help to determine Ireland’s competitiveness.  But these are all factors that impact directly and significantly on our businesses and, as such, our welfare is partly dependent on the actions of others.

At the same time however, FIBI members are very conscious of the factors over which we do have control, and on which we are increasingly focused.  I have already referred to the matter of cost containment and this remains high on the priority list for all of the international banks in respect of their existing operations here.

However, the main priority for us is the development of new business opportunities, which can serve the interests of the international banks, our communities and the wider economy.  We have commissioned some broad research in this area, which is still on-going.  Of course, any decisions on new activity will be taken by individual institutions in a competitive marketplace, but the early indications are that the areas of strongest opportunity might include shared services, aspects of leasing, linkage with the technology sector in solutions development and niche opportunities such as administration support for currency trading and treasury transactions.  We continue to view our biggest asset in this search for new opportunities as the ability and the adaptability of the people who work in financial services. These attributes will be needed as the banking world in Ireland and elsewhere adapts itself to the new business landscape.

We will continue to work with the Government, IDA Ireland and other key stakeholders to promote a policy framework conducive to attracting new banking activities to the IFSC and to highlight the challenges facing the sector.  Government must continue to focus on facilitating an environment where costs are low and policies are supportive; the regulator needs to be appropriately responsive to the particular circumstances of the international banking operation here; and we FIBI members need to prepare and position ourselves for the next cycle of development and growth.

As I stated at the outset, this conference affords us an excellent opportunity to hear various perspectives on these challenges and opportunities from a variety of interesting speakers.  And I’m sure that you will find many matters to raise in our Question & Answer sessions – please do participate.  In closing I wish to express our thanks to our conference sponsors, KPMG and Eversheds, as well as our lunch sponsors, IFG Corporate Pensions, without whose support this event would not be possible.

Thank you very much

FIBI is the representative voice of international banks in Ireland and is affiliated to the Irish Banking Federation

FIBI Conference – 17th September 2013

Eamonn Tuohy, Chairman FIBI, pictured at this year’s FIBI Conference

The event is unrivalled as Ireland’s premier international banking conference, providing a unique discussion and networking forum for senior executives, top practitioners and stakeholders from the international and domestic Banking and Financial Services sector.

With signs of stabilisation emerging across Europe and with the outlook improving slowly, the 2013 conference considered the challenges in the aftermath of the financial crisis, as well as charting a way forward by identifying the shape, scale and opportunity of the next growth cycle for Dublin’s IFSC and Ireland as a financial services hub. The conference also examined the ever-expanding set of regulatory and reform initiatives which are continuing to re-shape the financial services sector

Liquidity Management Briefing – 5th September 2013

Picture L to R: Ciaran Rogers, Director, KPMG, Mary Doyle, Head of Prudential Supervision, IBF and Wesley Murphy, Senior Policy Expert – Banking Policy, Central Bank

The briefing examined the key questions around the treatment of liquidity and liquid assets under the new CRR/CRD IV regime assessing key changes and on-going developments as well as the impact of the new rules and the timeframe for their implementation.

The Capital Requirements Regulation (CRR) / Capital Requirements Directive (CRD IV) regime has brought liquidity into the heart of new banking regulations, with a completely new framework evolving.  With the legislation now finalised and expected to be implemented in 2014, it will bring with it a dramatic change to the prudential framework for banks including short and medium term liquidity requirements