Thursday, October 03 14:25:22
The government may allow rescued banks to use more of their past losses to cut future tax bills and help them return to profit, according to a report on Bloomberg today.
In 2009, the government created a law to ensure lenders that transferred loans to the National Asset Management Agency paid tax on at least half their future Irish profit, irrespective of their deferred tax assets. The limit may be lifted either in the 2014 budget, due to be set out in Dublin on Oct. 15, or in the subsequent finance bill, said the person, who asked not to be identified, as a decision hasn't been made, the article's author, Joe Brennan, wrote.
Allied Irish Banks Plc (ALBK), the nation's largest state-owned bank, would be the biggest winner from a law change. At the end of June, AIB had 3.9 billion euros of deferred tax assets, amassed during the country's financial crisis. Bank of Ireland Plc had 1.7 billion euros of such assets.
"While not a panacea in itself, a removal of this obligation would be one additional measure in returning the sector to normal," Ciaran Callaghan, an analyst with Merrion Capital in Dublin, said in a note on Sept. 19.