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Wednesday, 5 Nov 2014

Written Answers Nos. 68-73

Mortgage Data

Question No. 69 answered with Question No. 64.

Ceisteanna (68)

Bernard Durkan

Ceist:

68. Deputy Bernard J. Durkan asked the Minister for Finance the total number of home owners affected by the sale of loan books to regulated or unregulated third parties; and if he will make a statement on the matter. [42363/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Central Bank does not publish data on this matter due to confidentiality reasons. Based on information in the public domain, however, a transaction worth approximately €223 million took place between two regulated entities and this is estimated to cover between 1,000 and 2,000 mortgages. With regard to unregulated entities, information from company announcements in the public domain would suggest that between 8,000 and 10,000 mortgages in total have been sold to unregulated entities in recent years.

As Minister for Finance, I am committed to bringing forward legislation that protects borrowers whose loans are sold to unregulated entities. The Government has reiterated this commitment on several occasions. In July and August of this year, my Department ran a public consultation seeking views on its proposed legislation to protect consumers whose loans are sold to unregulated entities.

The Department of Finance has now received 19 submissions from a range of respondents from the financial services industry, consumer groups, public representatives and individuals and other stakeholders. These have now been published on the Department's website at http://www.finance.gov.ie/what-we-do/banking-financial-services/consultations/responses-public-consultation-process-consumer.

Officials in my Department have carefully considered the submissions and are working with the Office of the Attorney General to progress this legislation. It is anticipated that it will be published by the end of this year.

As stated in the public consultation document, the proposed legislation is not retrospective. However, it is intended to apply to all loans, regardless of when they were acquired, thus capturing entities which have already purchased loan books.

Question No. 69 answered with Question No. 64.

Strategic Banking Corporation of Ireland Establishment

Ceisteanna (70)

Bernard Durkan

Ceist:

70. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects lending to business to improve following the setting up of the strategic investment bank; and if he will make a statement on the matter. [42371/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Strategic Banking Corporation of Ireland (SBCI) has been established by the Government as a means of ensuring that SMEs in Ireland are provided with sufficient finance for growth. Loan agreements with the international funders, KfW and the European Investment Bank, to the value of €550m have been signed to fund the SBCI during its initial period of operations.

The SBCI is funded to the value of €800m of which €150m is from KfW, €400m from the European Investment Bank and €250 from the National Pension Reserve Fund.

A key benefit of the SBCI will be its ability to facilitate loans with initial capital repayment breaks or the offering of loans with longer durations than are typically available currently. In such cases, SMEs would have greater capacity to make investments on the basis of improved cash flow matching, which makes growth more likely.  Additionally, the expanded pool of lending products could serve the needs of a wider cohort of SME customers than is presently served by lenders in the market. Improved credit products are expected to incentivise demand from SMEs for finance for the growth of their companies.

The SBCI will fund and design product programmes to be distributed through a range of channels of finance companies including traditional banking institutions.  The SBCI will focus on facilitating the funding of new entrants to this market.  By reducing barriers to entry in the SME finance market for new entrants, the SBCI will relentlessly encourage competition thereby improving the quality and range of SME finance available.

Credit is the lifeblood of all businesses and SMEs need to be able to access loans of greater duration, with enhanced terms and potentially at a lower cost facilitated by a state financial institution. KfW and the EIB have provided lower cost funding to the SBCI for up to a 10-year term. Locking in funds at a lower cost for a 10-year period is both a major benefit and a risk mitigant for the SMEs. Bank funding costs could increase for a whole host of reasons and to lock in lower cost funding would be a major benefit in protecting employment in the SME sector in such circumstances. This should provide increased confidence to the SME sector as it increases the certainty around the availability of funding to that sector even in adverse financial market conditions.  This will protect existing employment in the SME sector as well as boosting employment as SMEs will be able to finance investments using new types of lending products that are not available at present.

Foreign Direct Investment

Question No. 72 answered with Question No. 63.

Ceisteanna (71)

Bernard Durkan

Ceist:

71. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects to be in a position to attract FDI in the wake of recent taxation charges announced in budget 2015; and if he will make a statement on the matter. [42372/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In last month's Budget I announced several changes to Ireland's corporation tax regime, as part of an overall strategy to "play fair and play to win".   

This strategy was underpinned by extensive research undertaken and commissioned by my Department over the course of 2014 which has now been published.  One of the key findings of the research is that the FDI sector is very important for economic growth and employment in Ireland and that Ireland needs a competitive corporate tax offering to attract FDI. 

As a result, I published a "Road Map for Ireland's Tax Competitiveness" which updates last year's International Tax Strategy and sets out a comprehensive package of competitive tax measures designed to provide the foundations for Ireland to maintain and expand as a thriving hub for Foreign Direct Investment for years to come.

The Road Map includes:

- confirmation of the Government's continued commitment to maintaining the 12.5% corporation tax rate;

- an amendment to company residence rules to  provide that all companies that are incorporated in Ireland will be automatically tax resident here and thereby bring an end to the 'Double Irish'; and

- enhancements to the Irish tax regime, such as the tax offering for intellectual property, Research and Development, income tax (including SARP) and tax administration.

The Road Map has been well received both domestically and internationally, and further details may be found in the document which is published on the Budget website.

Question No. 72 answered with Question No. 63.

NAMA Portfolio

Ceisteanna (73)

Paul Murphy

Ceist:

73. Deputy Paul Murphy asked the Minister for Finance if he will provide data in tabular form on the number of houses and apartments that are in the possession of National Asset Management Agency that have been sold in the past 18 months, or are being rented, otherwise occupied or vacant; the total rental income on the units being rented or otherwise occupied. [42442/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The detail sought by the Deputy is set out below.

Table: Completed residential stock held by NAMA debtors and receivers (Republic of Ireland)

Residential units securing NAMA loans sold within the past 18 months

  4,000

Residual residential portfolio*

14,000 (10,000 apartments/4,000 houses)

Of which, total rented properties

  9,400

Total annual rental income

  €95m

Note: Completed properties that are not currently let are available on the open market for sale or rent through NAMA debtors or receivers or have been made available for social housing and are currently subject to transactions with local authorities/approved housing bodies. Many of these properties required NAMA funding to bring them to completion and, accordingly, have only recently become available for sale or rent.

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