Tuesday, 17 July 2012

Questions (92)

Peter Mathews

Question:

96 Deputy Peter Mathews asked the Minister for Finance the details of total cost of the banking collapse in Ireland provided by the Governor of the Central Bank of Ireland to a conference (details supplied) which included costs to foreign banks operating here, costs to shareholders and liability management exercises undertaken by the banks; and if he will make a statement on the matter. [34630/12]

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Written answers (Question to Minister for Finance)

I believe the Deputy is referring to a speech delivered by the Governor of the Central Bank of Ireland at the Institute for International and European Affairs (IIEA) on 29 June 2012 entitled — "More Europe" in the Financial Arena: Good for Ireland? The Central Bank has supplied me with the following breakdown of the allocation of banking losses/cost of capital injections that I understand the Governor referred to at the conference:

Allocation of Losses/ Costs of Capital Injections 2009-2011*

€billion

Liability Management Exercises

14

Write-down of Shareholders Funds in ELG Banks

29

Write-down of Shareholders Funds in Foreign Banks

28

Government Measures

64

125

*Internal Central Bank Estimates as at 1 June 2012.

For further details on the cost of banking recapitalisation to the State, please see the table below:

€bn

AIB/EBS

BoI

IL&P

IBRC (Anglo/INBS)

Total

Government preference Shares (2009) — NPRF

3.5

3.5*

7.0

Capital contributions (with Promissory Notes as consideration)/Special Investment Shares (2010) — Exchequer**

0.9

30.7

31.6

Ordinary Share Capital (2009) — Exchequer

4.0

4.0

Ordinary Share Capital (2010) — NPRF

3.7

3.7

Total pre-PCAR 2011 (A)

8.1

3.5

0

34.7

46.3

PCAR 2011:

Capital from Exchequer***

3.9

4.0

7.8

NPRF Capital

8.8

1.2

10.0

Total PCAR (B)

12.7

1.2

4.0

17.8

Total Cost of Recap for State (A) + (B)

20.7

4.7

4.0

34.7

64.1

*€1.7bn of BoI's government preference shares were converted to equity in May/June 2010 (€1.8bn still left in existence). The government also received €0.5bn from the warrants relating to BoI's preference shares (excluded from table above).

**The IBRC amount is made up of a total capital contribution for Anglo / INBS of €30.6bn and a special investment share of €0.1bn (INBS). The Anglo / INBS capital contribution impacted in full on the GGB in 2010. The consideration for the Anglo / INBS capital contribution was €30.6bn of promissory notes. These Promissory Notes are an amount due from the State to IBRC. Each year, on 31 March, €3.06bn is paid by the Exchequer to Anglo / INBS as part of the scheduled repayments of the promissory notes. The first such repayment was made on 31 March 2010.

***The Exchequer cost of the 2011 BoI recap is shown net of share sale to private investors (Completed in October, 2011).

****€1.3bn of the €4bn used to recapitalise IL&P was invested through the acquisition by the Minister of Irish Life from IL&P. It is expected that the proceeds of an onward sale of Irish Life in due course will reduce the amount the State has committed to the bank recapitalisation.

This recapitalisation table split year by year is:

Year

Anglo

INBS

AIB

EBS

BOI

IL&P

Total

2008

2009

4.0

0

3.5

0

3.5

0

11.0

2010

25.3

5.4

3.7

0.9

0

0

35.3

2011

0

0

12.7

0

1.2

2.7

16.5

2012

0

0

0

0

0

1.3

1.3

29.3

5.4

19.9

0.9

4.7

4.0

64.1