Latest news with #DiarmaidSheridan
Irish Times
17-05-2025
- Business
- Irish Times
FBD expected to pay special dividend to bring recent payments to €234m
FBD , the Republic's only indigenous general insurer, is likely to pay an almost €19 million special dividend later this year as it continues to distribute excess capital on its balance sheet, according to Davy. That would bring total payments since early 2022, between ordinary and special dividends, to almost €234 million – the equivalent of 44 per cent of the group's current market value. Davy analyst Diarmaid Sheridan estimates that FBD had a solvency capital ratio, a measure of reserves to ensure it can withstand a shock loss, equating to 200 per cent of its regulatory requirement at the end of March. 'This is materially above FBD's risk appetite of 150-170 per cent and incorporates the €30 million of adverse weather claims in January,' Mr Sheridan said, referring to claims mainly stemming from Storm Éowyn. READ MORE 'At 200 per cent, FBD has capital to support growth in gross written premiums and to continue to pay attractive dividends.' The analyst estimates that FBD will follow up its planned €1-a-share ordinary dividend payout next month on last year's profits – totalling almost €36 million – with a 50 cent special dividend later in the year. Still, the expected special reward for shareholders is half the level of special dividends distributed in the second half of each of the last two years. The combination of the planned ordinary and expected special dividends this year equates to 11.5 per cent of FBD's current €13 share price – a dividend yield that is more than double that on offer from some other European insurers, such as Allianz and Zurich Insurance Group. Still, shares in the company have advanced less than 3 per cent so far this year and remain flat over a 52-week period. FBD is not alone on the large dividends front in the sector. Allianz Ireland has paid €300 million to its German parent since the Covid-19 pandemic. Axa Ireland has handed €270 million to its Paris-based owner over the same period, though it decided to hold off making a payment on last year's earnings as it builds capacity to underwrite health insurance for its Laya Healthcare brand this year. FBD had come out ahead of scheduled annual results on a number of occasions in recent years to say that its earnings would be better than the market had been expecting, often boosted by releasing reserves that had been set aside for claims that proved to be too pessimistic. Its €77 million pretax profit for 2024 was almost 40 per cent above what the market had been expecting, before it moved in February to guide analysts' expectations higher. The chief executive of FBD Insurance, Tomás Ó Midheach, said last week in a trading update on the day of its annual general meeting (agm) that 'progress is being made' in settling claims related to Storm Éowyn. Insurance Ireland estimates that the industry-wide claims from the cyclone will amount to about €300 million. He said that FBD's profitability, excluding the impact of the storm, has been 'solid' so far this year and 'in line with expectations'. 'FBD remains a strongly capitalised business with a solvency capital ratio in excess of our stated risk appetite ,' he said . ' Our intention is to move closer to target capital levels over time, while preserving the sustainability of our annual ordinary dividend and maintaining a robust capital position for our growing business.'
Irish Times
13-05-2025
- Business
- Irish Times
Goldman Sachs reported to be in talks to launch retail bank in Ireland
Wall Street banking giant Goldman Sachs's is considering launching its online retail bank Marcus in the Irish market in an effort to get access to billions of euros of deposits from domestic households, according to a report. Bloomberg News reported on Tuesday that the group has held preliminary talks with regulators in recent months on a potential widening of the Marcus brand into the Republic, which continues to be dominated by the three domestic banks. That is even as Spanish bank Bankinter's Avant Money has become a bank branch of its parent in recent months, Revolut has set its sights on entering the Irish mortgage market this year, and nonbank lenders have become more active in the home loans market in the past year. 'While Marcus may be extremely well resourced, international banks Revolut, N26 and Bunq and platforms such as Raisin and Trade Republic have been active in Ireland offering deposits to Irish households for some time, only about 2 per cent of household deposits are held outside of the three domestically owned banks,' said Diarmaid Sheridan, an analyst with Davy. READ MORE The report cited Goldman Sachs as saying that Marcus remains focused on its US and UK markets, though it is exploring options for future growth areas. Germany has also been mentioned as the potential next market for the brand. Goldman launched Marcus in the US in 2016 as part of a push into consumer banking. It subsequently started operations in the UK in 2018. The growing interest of overseas banks in the Irish market follows a period of heightened profitability on the back of elevated interest rates and the return of the sector to loan growth in an expanding economy after years of contraction. A host of overseas lenders, including Lloyds Banking Group, Danske Bank, retreated from Irish retail banking in the wake of the financial crash. The final two long-standing overseas banks in the market, Ulster Bank and KBC Bank Ireland, decided four years ago to wind down gradually.
Irish Times
29-04-2025
- Business
- Irish Times
Irish average mortgages hit record €328,000 as buyers chase soaring prices
Average Irish mortgage drawdowns hit a record of almost €328,000 in the first three months of the year, according to figures from the banking industry, as borrowers took on more debt as home prices continued to soar amid a shortage of properties for sale. This was driven by a 9.6 per cent annual rise in loans on second-hand properties, to €370,790, according to Banking and Payments Federation Ireland 's (BPFI) latest quarterly mortgage drawdowns report, which draws on data going back to 2005. First-time-borrow mortgages breached the €300,000 level on average for the first time, rising 9.7 per cent to about €302,000 – or more than double the average such mortgages in early 2014, just after the Republic exited an international bailout programme. The total value of mortgages drawn down during the first quarter rose 19 per cent to €2.81 billion, almost double the pace of the 10.3 per cent increase in new loans, to 9,190, amid ongoing house price inflation. READ MORE [ Revolut to offer mortgages in Ireland in autumn Opens in new window ] Irish home prices rose by 8 per cent in the year to February, according to the latest data from the Central Statistics Office, as home completions and the availability of second-hand homes remain well below demand. House price inflation and mortgage levels would be even higher now, had the Central Bank not introduced borrowing limits a decade ago, according to observers. New home deliveries amounted to 30,330 last year, far short of the target of the then Fine Gael-Fianna Fáil-led government. The new Coalition, involving the same two parties, has set itself a target of delivering 41,000 homes this year and 43,000 in 2026. However, the Central Bank, BPFI and a number of economists estimate that completions will continue to fall short of target amid bottlenecks in the availability of land serviced by critical infrastructure, labour and equity funding for small to mid-sized developers. The Government has identified National Asset Management Agency chief executive Brendan McDonagh to become the State's new so-called 'housing tsar' – or head of the Government's planned new strategic housing activation office – that would aim to speed up delivery. First-time buyers remained the single largest segment of the market in the first quarter, accounting for 57.8 per cent of the number of loans drawn down and 59.1 per cent of the value, according to the latest BPFI figures. Remortgage and switching activity continued a rebound seen in the second half of last year, as many borrowers came off fixed-rate periods and others sought to take advantage of declining interest rates. The European Central Bank has cut its main deposit rate from 4 per cent to 2.25 per cent since last June. Remortgage and switching volumes and values increased by 18.7 per cent and 30.6 per cent, respectively, on the year in the first quarter. 'The mortgage market continued to demonstrate resilience in the first quarter,' said Diarmaid Sheridan, an analyst with Davy . 'Although the market is constrained by supply, strong underlying demand, supportive Government policy and falling interest rates should underpin strong mortgage lending throughout 2025.' Meanwhile, the BPFI's latest monthly mortgage approvals data shows that home loan approvals rose by 19 per cent in volume, to 4,492 cases, and almost 30 per cent in value, to €1.43 billion, in March. 'There were 52,021 mortgage approvals in the 12 months ending March 2025, valued at €15.8 billion,' said BPFI chief executive Brian Hayes. Some €14 billion of this was earmarked for home purchase, with most of the remainder made up of remortgaging, switching and top-ups.
