27 May 1999 Edition
Who wins from BoI merger?
Bank of Ireland, the second largest Irish retail bank, is set to take over the British Alliance and Leicester mortgage company. The merger was welcomed by Employment and Enterprise minister Mary Harney and Fine Gael finance spokesperson Michael Noonan.
But who will benefit from the BoI merger? We are barely through the first six months of 1999 and Irish banks have already declared nearly £2 billion in profits for the year 1998.
Bank after bank has announced record profits for 1998. Ulster Bank profits rose by 20%. ICC Bank rose 31%. TSB rose 30.7%. First Active rose 15.6%. EBS rose 29%. AIB was up 39% and was the first Irish company to produce profits of over 1 billion euros. Two weeks ago BoI announced record profits of £831 million, also over the 1 billion euro mark. Profits had increased for BoI by 24%.
These same banks are the ones which, with the introduction of the euro, increased their foreign exchange prices by between 300 and 600 percent. These are the same banks that year after year have been reaping substantial profits from the Irish economy. These profits in the case of AIB and BoI have been invested not in the Irish economy but in the purchase of banks in the USA, Britain and Easter Europe.
Already the third and fourth largest banks in Ireland, Ulster Bank and National Irish, are foreign owned. Now BoI is set to become another financial institution whose core interests lie outside the Irish economy.
There must be recognition that the banking sector is a vital part of the Irish economy. Banks exist because of their customers. It is the Irish people in their everyday work, in their local economies that have made the profits for Irish banks. The Irish economy has produced the most profitable financial sector in Europe.
Successive Dublin governments have reneged on their commitments to create a vibrant third force state-owned bank. Now the control of this vital state resource is drifting out of the Irish economy. The Dublin government must act to either fulfill its commitments to create a state-owned bank or at the very least keep the ownership of the Irish banking system in Irish hands. Anything less is a sellout of Irish interests.
But who will benefit from the BoI merger? We are barely through the first six months of 1999 and Irish banks have already declared nearly £2 billion in profits for the year 1998.
Bank after bank has announced record profits for 1998. Ulster Bank profits rose by 20%. ICC Bank rose 31%. TSB rose 30.7%. First Active rose 15.6%. EBS rose 29%. AIB was up 39% and was the first Irish company to produce profits of over 1 billion euros. Two weeks ago BoI announced record profits of £831 million, also over the 1 billion euro mark. Profits had increased for BoI by 24%.
These same banks are the ones which, with the introduction of the euro, increased their foreign exchange prices by between 300 and 600 percent. These are the same banks that year after year have been reaping substantial profits from the Irish economy. These profits in the case of AIB and BoI have been invested not in the Irish economy but in the purchase of banks in the USA, Britain and Easter Europe.
Already the third and fourth largest banks in Ireland, Ulster Bank and National Irish, are foreign owned. Now BoI is set to become another financial institution whose core interests lie outside the Irish economy.
There must be recognition that the banking sector is a vital part of the Irish economy. Banks exist because of their customers. It is the Irish people in their everyday work, in their local economies that have made the profits for Irish banks. The Irish economy has produced the most profitable financial sector in Europe.
Successive Dublin governments have reneged on their commitments to create a vibrant third force state-owned bank. Now the control of this vital state resource is drifting out of the Irish economy. The Dublin government must act to either fulfill its commitments to create a state-owned bank or at the very least keep the ownership of the Irish banking system in Irish hands. Anything less is a sellout of Irish interests.