The EML Payments Ltd (ASX: EML) share price is soaring on Thursday morning.
In morning trade, the payments company’s shares are up 17.8% to $3.24. Although, it remains a distant 45% away from its 52-week high of $5.89.
Let’s take a look at what is creating excitement among EML investors today.
Thumbs up for Ireland operations sends EML share price flying
In its latest update, EML Payments has informed investors of recent dialogue from the Central Bank of Ireland (CBI). This follows months of uncertainty for the company following the initiation of an investigation after CBI found regulatory concerns within the PFS Card Services (Ireland) Limited (PCSIL) business.
According to the release, CBI has advised that it will allow PCSIL to sign new customers and launch new programs whilst staying within the material growth restrictions. Positively, PCSIL expects it can meet the obligations. This removes any previous concern of EML’s subsidiary losing the ability to continue expansion.
Additionally, broad-based reductions in limit controls on programs will not be imposed. This is also beneficial for the value of transactions processed by the company. Furthermore, CBI will continue to work with PCSIL to agree on appropriate limits under its risk management and controls framework.
Lastly, the central bank intends to impose a material growth limitation over PCSIL’s total payment volumes. This will be in place for 12 months with the potential of it being removed earlier following third-party verification of PCSIL implementing its remediation plan effectively.
The news has been well received by the market today, with the EML Payments share price breaking above $3 again.
Following this, EML’s PCSIL intends to submit documentation to work with CBI on growth limits. The Ireland subsidiary intends to do this by 30 November 2021.
Notably, the update also indicated that PCSIL’s remediation plan is on track. The card services business has been removing high volume-low yielding programs to comply with a material growth restriction.
Despite today’s recovery, the EML Payments share price is still down 22% year-to-date.