GDP EVENT BOUND FOR CORK AND KERRY

Fresh off the back of three very successful events in Northern Ireland, the GDP team have agreed to take their Banks, Ethical or Criminal roadshow to the Republic of Ireland.  The reason behind these events is threefold, namely to Educate, Inform and Empower debtors to take control of their finances.
The keynote speaker with be GDP Consultant Mr Nick Leeson, better known for his role in the collapse of Barings bank almost twenty years ago, however has been spending the last  twelve months assisting borrowers deal with their banking challenges in Ireland.

"We are really looking forward to the events in Cork and Kerry, as over the last twelve months we have been trying to assist people from all across the country deal better with their banking challenges.  The road show was a resounding success in Northern Ireland, so it made sense to carry it through to the Republic of Ireland.

The team will be in the Clarion Hotel in Cork on Tuesday 25th March at 7.30pm and the next day in Killarney Plaza hotel at 1pm.  The event is suited to anyone in debt  particular the SME;s who are struggling currently with indebted balance sheets.

"Debt Forgiveness, Debt restructuring, call it what you want, is not a new phenomenon, and has been on-going since banking business began.  However its something that your are not really supposed to be talking about - especially in this country" commented founding GDP Partnership partner Mr Conor Devine.  We hope to carry on the good work we have been doing in the last few years in this debt advisory space, by raising awareness that there are solutions to resolving debt challenges, and also ones that sit outside the formal insolvency legislation through Mediation.

If you wish to attend this FREE event you need to register with Katie@gdpni.com asap as limited spaces are available. 

We look forward to seeing you there

#GDP

Irish SMEs now under huge threat from Stress Tests

Yet again Professor Morgan Kelly has created a stir among the Irish Media predicting doom and gloom if the debt overhang associated with property in SMEs is not dealt with.

He is quite right in identifying that a lot of SMEs during the boom times did acquire quite a large property portfolio in the belief that this would generate substantial returns over a period of years. We all know that this turned out not to be the case and has now put their trading business in jeopardy.  In fact only 6 months ago the Central bank issued a statement telling us that there was €50bn of borrowings out to SME’s in Ireland and possibly over half of that impaired.  This is a very sobering thought.

We are glad to report that some of the banks that we are working with are rebasing, writing off or parking the debt for quite a period of time therefore not affecting the trade or businesses. However it would appear that unfortunately RBS under their GRG department are not engaging this form of discussion. Given the fact that they had such a large presence sectorally in the banking sector in Ireland this is having an ongoing adverse affect on quite a variety and number of businesses.

 

AIB and Bank of Ireland have already provisioned for a lot of these property loans and have written them down as we know by 65% to 70% as reflected in their accounts therefore they are in a much better position to engage more fruitfully with the borrowers.

We at GDP are glad to report that on a number of cases the banks have been very receptive to our proposals regarding a rebase and write off.  An important point to note here is that without the assistance of the bank insolvency was the only option by way of Company liquidation and/or bankruptcy.

Let us hope that Professor Morgan Kelly's contribution to this debate would be taken seriously by the banks, the Government and inform SMEs of the option available to them. If it were not for the low interest rate currently that SMEs are paying to service their property loans there is no doubt they would have potentially been put out of business. How long will these low rates last for some say a further 2 years. Therefore now is the time to deal with the property debt associated with being over geared and engage in the overall facing restructuring discussions with the Bank. 

As Morgan Kelly has pointed out, later this year Europe is running an experiment in terms of the Stress tests for Irish banks.  If they follow through with this and aggressively make the banks fall into line and clean up their own balance sheets, they will subsequently have to deal very aggressively with the Irish SME’s.  If this happens, a lot of trouble is pending down the line as the SME market is the lifeline of the Irish economy.  We watch this thread with interest.

 

JAMES GIBBONS LLB

DEBT FORGIVENESS: LETS GET ON WITH IT. . . . . .

Once again amazing times in the Republic of Ireland for Allied Irish Bank and First Trust. It is good news to see that the Bank is in on target to be investible in early 2015 as said by their Chief Executive Mr Duffy and that their losses from 2013 have halved. Once again the platform of AIB is to be good as the Bank is returning to an operating profit.

More interestingly for borrowers in Northern Ireland the Bank, AIB or First Trust are seeking to write of £3.5 Billion of bailout loans. Yes I will say that again £3.5 Billion.

Obviously this will accelerate the solvency of the Bank and no doubt put them on a sound platform moving forward. My question in this situation is always, why are AIB not seeking to write of smaller loans for borrowers including mortgage holders and SME's who have an exposure to the property sector and is hindering them from becoming more productive and revenue generators in our economy? Perhaps Mr Duffy would like to explain.

 We raise this point at this time simply because borrowers are becoming even more disillusioned with the responses they are receiving from our native Bankers in Ireland and the United Kingdom and their demands for settlements of guarantees or borrowings as a consequence of the crash that the Banks fuelled to such an exorbitant and stratospheric level. We would strongly urge all the institutions to be more pragmatic in their approach to bad loans and we would certainly suggest that "what is sauce for the goose is sauce for the gander" so if AIB are entitled to bailout write offs then why not the borrowers?

GDP are pleased to announce that they have achieved write downs to date but the Banks should come out in a public way now and say they are open to do business based on their ability to write down and/or write of loans as has been disclosed yesterday by AIB.

Can you imagine the reaction if the AIB Executives had of looked for bonuses for their performance over this last year. Then there would have been an outcry!

James Gibbons LLB