Corporate clients defect

Greencore pulled off another impressive deal in last week's merger with Northern Foods. With Greencore chief Patrick Coveney getting the top job in the newly-created Essenta Foods, it's clear the Irish firm is the big winner in the merger.

A look at the list of advisers to the deal shows worrying signs for Irish investment bankers, though. While IBI Corporate Finance and Goodbody Stockbrokers were involved, they will have to split the advisory fees with Barclays.

Irish companies are increasingly turning to foreign bankers, with Barclays and HSBC doing quite well in snapping up corporate clients here. The main banks here have lately taken their eyes off the threat posed by foreign rivals to their corporate clients. AIB's capital markets division is already shrinking by closing offices abroad and selling Goodbody Stockbrokers, while Bank of Ireland sold Davy some years ago.

If the Irish banks can no longer provide a full range of services here and abroad to Irish firms, it is likely they will play a diminished role in corporate activity in future.

TVC's safe German bet

TVC Holdings, the investment firm backed by the Reihill family, produced a solid set of interim results this month. That was thanks in part to its decision to hold onto a substantial portion of cash and bonds, accounting for about a third of its net assets.

The accounts reveal TVC avoided the crash in Irish bonds by buying German debt. Although German bonds are unlikely to provide spectacular returns, they are about the safest bet at present. The TVC accounts show that, when the bonds were redeemed in April, TVC decided to reinvest in more German debt, holding about €10m worth. TVC shares currently trade at a discount to its net asset value, but that gap would be wider were it not for the decision to put its cash into German debt.

Corporation tax rate fears

With the IMF in town assessing the needs of the banks and public finances, the big fear is that our low corporate tax rate will rise if the government is forced to accept a bailout.

The 12.5% rate has attracted a lot of companies to Ireland, but in recent years several British firms have made Ireland their corporate HQ to take advantage of the low rate without having other substantial investment here. One of those was pharmaceutical giant Shire.

Shire chief executive Angus Russell didn't make the most encouraging of comments in an interview with the Dow Jones news wire last week when asked about the impact of an increase for Shire. "We're always reviewing that situation, and we stay open-minded," he said.