With the uncertainty of Brexit still clogging news feeds across the UK and Ireland, there has once again been some positive news for Dublin. This time in the mould of the Shipping Industry. There has been a marked increase in business as a result of Brexit as many companies are beginning to bypass British ports.
Although it has put some pressure on the shipping lanes and
ports the news has been generally welcomed by those in Dublin and other
Dublin port recently announced that Luxembourg based CLdN ro-ro shipping company has added two new Mega-vessels to its direct Dublin route from the ports fo Rotterdam and Zeebrugge.
A representative of CLdN said: “As a company, we have taken a long-term view on Dublin Port and invested accordingly. Our next generation of Ro-Ro vessels, MV Celine and now MV Laureline, are a testament to that commitment. Since entering the Dublin market mid-recession in 2009, we have grown our direct services from Dublin Port to some seven weekly calls to Zeebrugge and Rotterdam. We believe we are ideally positioned to develop this trade further as a direct alternative to the UK landbridge. Customers want certainty on consignments that can travel on direct routes, even if that means a slower journey time, and our newest addition Laureline is now in place to meet growing demand.”
With such commitment from outside companies and expected investment and growth set to continue, Brexit uncertainty has certainly had mixed results fro Ireland. With the European landbridge becoming less important, Dublin port and other regional harbours are reaping the benefits of direct routes to mainland Europe.
The Landbridge is the transit point linking Ireland and mainland Europe. An estimated 3 million tonnes of goods move through the UK and the landbruidge each year. Currently, more than two and a half times that amount move on direct routes between Dublin and Europe.
This number is only expected to rise.
CEO of Dublin Port Eamonn O’Reilly said: “We’re starting to see alternatives developing, options over the landbridge as people grow concerned about the issue”.
“We’re starting to see faster-moving consumer goods
which in the past would’ve been guaranteed access to the Irish market through
the UK, we’re now seeing a switch, these goods are coming directly to Dublin
from continental Europe.
“Those companies who don’t need to use the UK are
beginning to avail of those options, and make sure they have established
commercial relationships to be able to move goods no matter what happens with
“The shipping industry can adapt very quickly, the one
thing Brexit is not going to do, it’s not going to increase the number of goods
flowing in and out of Britain.
“So if there are ships going in and out of Britain that
doesn’t have enough business, they can easily run in and out of Dublin.
“The shipping industry can redeploy ships at very short
notice to make up any shortfall, and respond to an increase in demand.
The port says the addition of the ClDN “super ferry” is a vote of confidence in Ireland’s port system.
Since the announcemtn of Brexit plans have been developed to deal with almsot every eventuality.
While politicians still mill over the particulars of Brexit, Industries have began moving forward.
Eamonn O’Reilly, Chief Executive, Dublin Port Company, said: “The arrival of Laureline at Dublin Port is further evidence of the shipping industry responding to market demand with Brexit upon us. It is a vote of confidence by CLdN in expanding its Dublin service so soon after the introduction of Celine and is mirrored by other significant customer investments such as Irish Ferries’ new ship W.B. Yeats servicing both freight and passenger demand between Dublin and Cherbourg.
While Teresa may and others have tried to dampen the impact of Brexit and the potential need for Customs checks, EU leaders have stated that there will need to be some mechanism put in place.
For this reason many companies have opted to bypass UK ports altogether. Although in the short term it might mean a reduction in the number of ships on the lane overall it will mean more business for Irish ports.
As we have seen already seen Brexit has had a mixed effect on Dublin. Although the long term implications are not yet known as Brexit still has not gone through, for the time being, it is looking positive for Dublin’s economy.
We have seen other recent reports about the exodus of financial businesses form London to Dublin and other European cities.
Independent news media (INM) has made a number of announcements this week following publications of its financial state to December 2018. While there was some positive news in regards to profits for the company, failings and changes to how the company operates also followed.
This includes a new subscription plan, potential redundancies and finding new ways to offset falling advertising and publication profits.
Independent News & Media (INM) announced profits of €24.1m for 2018. This was above market expectations but included a number of large one-off costs which would have increased its profit margins even more.
While above market expectations, it was still 15% below 2017
The media companies titles include Independent.ie, Sunday
independent the Sunday world and Belfast Telegraph among others. It is the
largest Private owned media company in the country with some popular titles,
however, it has admitted shortcomings and a need for change.
The legal costs totalling €3.5 million are due to investigation in regards to data leaks and whistleblower allegations within the company.
The investigations were launched by the Office of the Director of Corporate Enforcement (ODCE) and the Data Protection Commissioner (DPC). This have led to the appointment of High Court inspectors after an alleged major data breach at the group in 2014.
“The company is co-operating with the inspectors and the DPC in their respective investigations,” said Mr Michael Doorly the companies chief executive. They do not expect costs to reach the same level in 2019.
Fall in profits
The fall in profits for 2018 has been primarily blamed on a
decline in print and online advertising. As media giants such as Google and
Facebook continue to consolidate online advertising, it has been increasingly
difficult for media outlets to maintain previous profit margins.
There was a silver lining in regards to Classified ads,
primarily with carsireland.com which saw profits increase by 18.2%.
Need for change
Its chief executive Mr Doorly and chairman Murdoch MacLennan
said the company has recognised the need for change and that they have been
looking at different avenue to increase the companies profitability.
Mr Murdoch said “We have recorded a financial performance
for 2018 ahead of market expectations and I can assure you that despite the
challenges facing the industry the board and senior executive team of your
group are both determined and confident that we are heading in the right
direction to build a sustainable business for the future and to create
With the rapid change within the Industry, Mr Doorly said that some tough choices must be made. He recognised that the company faces a number of challenges in the future.
“While change is happening right across our sector, which is facing the challenges of digital disruption, changing consumer behaviours and economic shifts, I am pleased to report that we are moving forward in reshaping our business to better meet the needs of our print and online readers and customers. Producing quality content remains essential to the future of our business and to that end the calibre of our editorial team is unmatched in the Irish market. I would like to thank all of my colleagues in INM for their continued commitment and resolve in delivering to date on our new strategy,” he said.
Plans for the Future
Earlier this year INM told staff that is expected to make 30 redundancies across the business, as management unveiled its new strategic three-year plan reported RTE.
Among the changes INM plan to introduce a subscription
service to its online publications. It hoped to roll out this project by 2020.
This is hoped to reduce the reliance on online advertising.
“We can’t just slap up a paywall. We need to be able to understand our audience,” Mr Doorly said. Recognising that some customers will be turned away by these announcements.
It is hoped that their apps and websites will also be updated for better user experiences.
“We will continue to confront the many challenges currently dominating our industry’s wide agenda, including the unfettered advance of the global technology platforms such as Google and Facebook, the inexorable rise of fake news and the cold climate for consolidation in the Irish market as a result of inadequacies in the competition approval process, not to mention our outdated libel and legal regime.”relayed the Irish Times.
Some publications in Ireland already use a subscription model on various topics including the Irish Times. It is not yet known how INM will introduce the subscription model to its publications.
With a new business plan going forward and an ever-changing
environment, it is an exciting and challenging time for media of all kinds.
Thousands of Ulster bank mortgage customers are due to a refund after they were overcharged by the bank. This follows similar situations at permanent TSB and other financial lenders. The most recent findings came about due to internal checks by the bank.
This latest error was discovered when the bank investigated tracker mortgage overcharging. But these new findings are related to the banks fixed-rate mortgages.
Findings and compensation
Close to 10,000 customers have been affected. The bank stated that an average refund was being issued to the tune of €2300. The bank has also stated that they will issue compensation in regards to the error.
Meanwhile, other customers were charged too little. Of these, the bank will not seek repayment.
The fixed price error occurred when customers were placed on different rates than those they applied had for. The average difference in interest rates over the affected period was 0.37pc.
Although the bank was entitled to apply the most up-to-date rates they did not make this clear to their customers at the time.
The period of the error was between 2001 and 2008. The overcharging lasted roughly two years, but no complaints were made by customers as they did not notice the error. This latest news was widely broadcast by both RTE and the Irish Times both of which have continued their long coverage of the banking sector
Deputy chief executive at Ulster Bank Paul Stanley said:
“As part of a review of our mortgage book, Ulster Bank has identified a
historic error that has affected our customers. Some customers have benefited,
but unfortunately, other customers have been negatively affected.”
“For those customers who have benefited we will not be
changing anything, and they will keep the benefit.
He continued “For those customers who have been negatively affected, we are currently in the process of writing to them to apologise, explain what it means for them, and provide them with refunds and compensation,”.
Earlier this year Ulster Bank said it was to repay 23,000 business customers after finding it had charged them the wrong fees.
Although Mr Stanley was not forthcoming with how much the total cost would be to the bank, he did admit that €167 million had been set aside for both the overcharging and business related errors.
Action to be taken
The bank has said that customers do not need to take any action and will be contacted by the bank if affected.
“Customers do not need to take any action – we will write to them if they have been negatively affected,” the bank chief said.
They have announced compensation which will vary but should average around €500 per affected customer. They have stated that the aim to have addressed this issue and its tracker mortgages problmes before the end of the year.
Tracker mortgage scandal
This latest announcement is just one new discovery in a long list of scandals to hit the financial sector in recent years. The tracker mortgage scandal has affected numerous banks including AIB, Bank of Ireland, Ulster Bank, Permanent TSB, KBC Bank.
Up to 40000 people have been affected by the issue. This varied from people being incorrectly charged to being denied mortgages altogether.
A February report from the Irish Times noted that banks had set aside almost €1 billion in order to meet compensation and redress claims.
The Central bank said it hoped that the vast majority of those effaced will be notified and compensated by December 2019. The three-year-long probe has been the biggest conducted by the Central Bank. They have stated they will pursue mortgage lenders until they are satisfied with the results.
The latest revelations from Ulster bank will doing noting to help the public’s trust in such institutions. This can also be seen in the number of complaints to the Financial services and pensions ombudsman.
The annual report from the ombudsman released this week show that mortgage and insurance matters account for almost 2/3 of all complaints made to the office.
There was almost 1700 mortgages related cases heard with permanent TSB, AIB and the bank of Ireland coming under particular scrutiny.
Some of these findings were reproduced in the Irish Examiner and show the huge array of finaical institutions under continunig scrutiny.
Ulster banks willingness to admit mistakes in regards to their fixed mortgages rates and to assist customers will most likely be welcomed by the Central bank and their affected customers.
Barclays has continued the trend of major UK institutions moving their operations to Dublin post-Brexit. The company is set to move its mainland European operations to the Irish capital over the coming months.
This move will set Barclays as the biggest bank in Ireland in terms of assets. Its UK and European operations have been valued at close to €190 billion by accounting firm EY.
The evaluations of these operations have come about from the accounting firm EY. They have used a process of mutual benefit in estimating the value of operations in different countries in comparison to Ireland.
A spokesperson for EY said “The basis of the value for the consideration is ‘market value’ – the price that would be paid in a transaction between a willing vendor to a willing purchaser, each of whom is acting for self-interest and gain, and both of whom are equally well-informed about the companies and the market in which they operate,” noted EY in relation to the valuation placed on the French business”
Some of the operations being moved from other European countries include Credit card and corporate investment from Germany and legacy mortgages from Italy.
Barclays has followed a similar line to many other businesses in the UK in recent months. They have made efforts to push through legal frameworks which will allow them to continue operations in the EU, other notable companies include Aviva and Standard life.
The high court judge presiding over the legal changes
criticised the aggressiveness of the changes. Highlighting some of the
desperation reflected by the uncertainty of Brexit.
TheMr justice Richard Snowden said, “This was a significant, complex, and in certain legal respects, a novel scheme,”.
He added: “It could not at any point in the design process have been thought that the court would simply wave the scheme through without having time for consideration.” Although the grievances remianed the legistaltion was still passesd. Thsi has allowed Braclays to proceed with its move.
The bank is expected to double its number of staff in Dublin to 300 by the end of the year. This will include the hiring of new staff and the movemetn of some employees from its London offices.
Dublin remains popular choice
Another survey conducted by EY shows that Dublin remains the most popular choice for financial service firms post-Brexit. Exisiting connections, a strong and educated workforace and easy transiton are just some of the reasons highlighted fro Dublin.
The survey noted that while London is and will remain a financial center for long period of time there have been notable moves by some of the largest institution in the UK.
Cormac Kelly, Financial Services Brexit Lead for EY in Ireland, noted that the major reason for companies wishing to move was the uncertainty surrounding Brexit. He cpmmented that many companies wanted to relocate their business and people to places in which they could freely operate within the EU.
“We are seeing this first-hand with the arrival of these firms who are taking new office space and recruiting talent as well as seconding experts from their worldwide offices into high value, skilled roles in Dublin,” Mr Kelly said.
Companies that have announced Irish investments connected to Brexit include Barclays, Morgan Stanley, TD Securities, Wasdell, Delphi /Aptiv, Simmons & Simmons, S&P Global, Thomson Reuters, Equilend and Coinbase, the IDA said.
EY estimates that almost 7000 jobs could be in jeopardy in London’s financial sector. Omar Ali, financial services head in EY said: “The relocation of 7,000 high-paid finance jobs will inevitably hit the UK tax base,”. “Even using a conservative estimate . . . the direct loss to the Exchequer from employment taxes would be around £600m. In reality, the average salary and therefore tax loss is likely to be much higher.” recorded the Finacnial Times.
Paris and FRankfurt are also two other prominent locatiosn for finacnial frims moving from the UK.
US firm citigroup and Bank of America have made substancial finiancial investments to both Paris and Dublin in recent months. This has inlcuded the leasing of property and the movemtbn of some services to these areas.
With so much uncertainty we are going to see an increasing number of firms move away from the UK. The uncertainty of new policies and the political stalemate will do nothing to soften some of the moves an positions of these companies in recent months.
Hopefully for Dublin at least this trends continues and Dublin will grow as a financial center to rival its other European counterparts.