Written Answers Nos. 175-195
175. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the plans he has to designate a Chief Risks Officer and appoint a professionally qualified Head of Finance in his Department; and if he will make a statement on the matter. [48402/12]
View answerMy Department pursues a pro-active Risk Management Policy. A Risk Management Committee, chaired by the Head of Corporate Services Division, coordinates risk management across the Department and reports to the Management Advisory Committee (MAC). Individual Heads of Division are responsible for managing Risk in their own areas of operation and Risk management is a standing item on the agenda of the monthly meetings of the MAC. This structure and approach is in line with Department of Finance guidelines. Nevertheless, my Department is constantly striving to enhance its risk management processes in line with best practice. In that context, it is considering a recommendation from the Department’s external Audit Committee that a Chief Risk Officer be designated for the Department. Given the very diverse range of functions fulfilled by the Department and the need to concentrate increasingly scarce staff resources on major current and upcoming operational responsibilities, it is has not been possible to identify a candidate to fulfil the role who is free of line management responsibilities. The Secretary General of my Department invited the audit committee to meet with the MAC to elaborate further on its proposal and set out its view of how a dedicated chief risk officer would operate in the Department and this meeting will take place shortly.
The audit committee has also recommended the appointment of a head of finance at counsellor/principal officer grade who holds a professional accounting qualification and who has significant relevant experience. While the current moratorium on recruitment and the limited possibilities for redeployment of a suitably qualified candidate from elsewhere in the public service means that it has not been possible to implement this recommendation to date, my Department is developing a proposal to strengthen and upgrade its professional capacities in the accounting area which will feature in the Department’s workforce plan which will be finalised shortly.
In the meantime, I note that both internal audits and external Comptroller and Auditor General audits have reported satisfaction with the management and operation of the Department’s Finance Unit.
177. Deputy Gerry Adams asked the Tánaiste and Minister for Foreign Affairs and Trade if he will provide details of the type and frequency of North South engagement his Department undertakes; the current priorities in this area; the number of whole time equivalent staff assigned to these matters; the grades involved and the amount of time each grade spends on North South Activities as a proportion of their WTE employment; the co-ordination arrangements that have been put in place; if there are any current vacancies in North South Co-operation unites; the duration of this vacancy and the steps being taken to fill the vacancy. [48546/12]
View answerI am and my officials are directly involved in ongoing and frequent North South engagement up to and including the highest levels. This involves having extensive contact with the Northern Ireland Executive and Assembly, political parties, civil society and all sides of the community. This work is undertaken in the context of actively pursuing our priorities for advancing cooperation through the structures of the North South Ministerial Council, most recently at the plenary meeting of the Council which took place last Friday 2 November in Armagh. The engagement involves many officials in the Department in addition to the current team of four officers, two at first secretary/assistant principal level, one administrative officer and one clerical officer) within the Department's Anglo-Irish Division who deal primarily with matters relating to North South economic co-operation, and the nine officers (one at counsellor/principal officer level, and others at first secretary/assistant principal, higher executive officer and clerical officer levels, who are working as part of the Joint Secretariat of the North South Ministerial Council in Armagh.
178. D'fhiafraigh Deputy Dessie Ellis den an Tánaiste agus Aire Gnóthaí Eachtracha agus Trádála cén maoiniú atá curtha ar fáil do na háisíneachtaí trasteorann don bhliain 2012; cén céatadán den mhaoiniú a caitheadh ar thuarastail gach bliain ó 2008; an bhfuil fostaithe na n-áisíneachtaí atá lonnaithe ó dheas ag feidhmiú faoi ráta tuarastail atá bunaithe ar an gciorclán is déanaí de chuid na Státseirbhíse, Ciorclán 28/2009; ar íocadh incrimintí le foireann na n-áisíneachtaí sin ó 2008; agus an ndéanfaidh sé ráiteas ina thaobh. [48605/12]
View answerNil aon fhreagracht dhíreach ar mo Roinnse maidir leis na Forais Fhorfheidhmithe Thuaidh-Theas a bunaíodh faoi Chomhaontú na Breataine-na hÉireann. San dlínse seo tá an fhreagracht sin ar chúig Roinn Stáit: Roinn Ealaíon, Oidhreachta agus Gaeltachta (Uiscebhealaí Éireannn, an Foras Teanga Thuaidh/Theas a chuimsíonn Foras na Gaeilge agus Bord na hUltaise), an Roinn Post, Fiontair agus Nuálaíochta (IdirThrádáil Éireann), an Roinn Cumarsáide, Fuinnimh agus Acmhainní Nádúrtha (Coimisiún an Fheabhail, Chairlinn agus Shoilse Éireann-Gníomhaireacht na Loch); Roinn Caitheachais Poiblí agus Athchóirithe (Clár Speisialta AE); an Roinn Sláinte (An Bord um Chur Chun Cinn na Sábháilteachta Bia). De bhreis air seo, tá freagracht maidir le Turasóireacht Éireann ar an Roinn Iompair, Turasóireachta agus Spóirt.
179. Deputy Patrick O'Donovan asked the Tánaiste and Minister for Foreign Affairs and Trade if he will consider the possibility of a national trade mission to Great Britain, which was proposed at a recent meeting of the British Irish Parliamentary Assembly, of a nature similar to those that have been led by government Ministers to countries including China, in an effort to have trade boosted in our nearest foreign market; and if he will make a statement on the matter. [48627/12]
View answerBritain is a major export market for Irish business and is also a strategic export market in that it is often the first export destination for indigenous companies. As a large and nearby market, with similar business practices and client needs, it is a natural fit for Irish exporters. It accounts, for example, for 41% of Irish food and drink exports and the market supports vital employment in the Irish economy. It is also a growing market. Notwithstanding the current economic challenges globally, for the first eight months of this year, our merchandise exports to Britain have increased by more than €1 billion compared with the same period last year, reflecting both the quality and value of the offering from Irish exporters and the priority attached to the market by the Government.
Reflecting that importance, the level of trade promotion activity by the Government in the British market is already quite extensive. To date in 2012 there have been 25 ministerial or high-level visits to Britain incorporating a trade promotion element. Typically these have been in support of specific sectorial trade promotional activities by the State development agencies.
Our economic agencies and our diplomatic service have a significant market presence in Britain, and are well positioned to support exporters there on a targeted and ongoing basis.
Notwithstanding that extensive promotional effort and export performance, the Government is clear that we must seek to further develop our trade relationship with Britain. The joint statement issued by the Taoiseach and PM Cameron in March of this year aims to build on the existing strong trade relations between Ireland and the UK. Supporting and further developing this growth is something to which I am devoting considerable attention.
The joint statement identifies a number of sectors where collaboration between British and Irish entities could give rise to mutual gain and work is ongoing between the two Governments in pursuit of that agenda.
It is also true that, even without availing of the Government support available, it is possible for Irish companies to engage in Britain with relative ease. Many Irish suppliers maintain a physical presence in the UK and in some sectors customers operate as a UK and Ireland business, resulting in market needs which are very closely aligned.
I should also note that trade missions may take place under the auspices of non- governmental groups, including Chambers of Commerce, which bring together companies with common interests. The Deputy may be aware, for example, that there is a newly formed British Irish Chamber of Commerce which I expect will engage in activities designed to increase trade between Britain and Ireland.
Because of the importance of the British market, I intend to keep the level and nature of trade promotion with Britain under review and to support whatever activities best generate new business opportunities and employment in Irish firms.
182. Deputy Tom Fleming asked the Tánaiste and Minister for Foreign Affairs and Trade if he will provide a detailed breakdown of all moneys allocated to Irish aid for overseas development during the past five years; if he is satisfied that all moneys went to the projects for which they were intended; if all this funding was spent appropriately and accounted for; and if he will make a statement on the matter. [48735/12]
View answerIreland’s aid programme prioritises the fight against global poverty and hunger. Every day it saves lives and builds capacity for the future – making a real difference in the lives of millions. The programme is central to our foreign policy, has an enviable international reputation, and consistently enjoys strong political and public support.
Over the past five years, and despite the very difficult economic conditions facing the country for much of that period, Ireland has consistently contributed over 0.52% of gross national product, GNP, towards Official Development Assistance, ODA. This level of contribution has earned us a strong reputation for being a generous and reliable donor, and clearly demonstrates the Government’s determination to meet our commitments towards assisting some of the world poorest people. In the current year, Ireland will contribute €639 million to ODA.
Each year a detailed analysis of Ireland’s ODA is published in the statistical annexes to the Irish Aid annual report. The annexes provide a comprehensive analysis of Ireland’s ODA, including the developing countries supported; the areas or sectors in which we engage, and the partner organisations implementing our development programmes. I am arranging for copies of the annual reports for the past five years to be sent to the Deputy.
Irish Aid works in some of the world’s least developed countries, often in challenging and risky environments. Many times we are working through government systems and other partnerships with relatively low capacity. We have put in place rigorous systems for planning, monitoring, evaluating and auditing the aid programme to ensure funding is spent for the purposes intended. We continually monitor and assess programmes both at mission level and by headquarters staff to ensure that programmes deliver the intended results. A comprehensive system of internal audit is in place, with an independent audit committee which reports directly to the Secretary General. We work closely with national audit offices and provide assistance where appropriate. All instances and/or allegations of fraud or misappropriation are reported directly to the Secretary General and onwards to the Comptroller and Auditor General. However no control environment, no matter how strong, can provide cast iron assurances that fraud or misappropriation will not occur. In the last two weeks evidence of serious misappropriation of funding in Uganda has come to light concerning Irish and other donor funding intended for northern Uganda. The Tánaiste and Minister for Foreign Affairs and Trade took immediate and decisive action and suspended all aid to Uganda through government systems, until such time as the funding is repaid and action taken against the perpetrators of this fraud. In addition a team of evaluation and audit officials from my Department travelled to Uganda to investigate the findngs of the Auditor General and will be reporting back shortly.
The role of the Ugandan Auditor General was very important in identifying this fraud especially in view of the levels of collusion involved. Irish Aid has been assisting this office over a number of years as part of its programme of building strong and accountable Government institutions. Corruption and fraud must be fought if continuing progress is to be made in Africa. Offices of Auditors General are key to this fight and we will continue to support them where possible.
We have now received confirmation from the Ugandan Government that all Irish Aid funding misappropriated will be repaid; the officials who engaged in financial impropriety will be fully prosecuted, and that strong measures will be undertaken to tighten internal controls. We welcome this commitment, and our Ambassador in Kampala is working with the Ugandan authorities in bringing matters forward. Finally, we are determined to ensure the lessons learned from Uganda are incorporated into our business control system.
183. Deputy Eoghan Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade the sectors of the public sector that are currently employed on a roster basis and if there are any plans to remove employees from the rostering system. [49074/12]
View answerI understand that the Deputy’s question relates to cases involving staff being moved from roster-working to annualised hours. No such cases arise in the Department of Foreign Affairs and Trade.
184. Deputy James Bannon asked the Tánaiste and Minister for Foreign Affairs and Trade the exact number of public servants who are back in employment in the public service, who are on pensions and have accepted lump sums; and if he will make a statement on the matter. [49086/12]
View answerI understand that the Deputy’s question relates to certain retirements on or before 29 February 2012 – the end of the so-called grace period – where superannuation benefits were calculated on the basis of pre-1 January 2010 salary scales. One officer who retired under this arrangement has been temporarily re-engaged in order to assist with the Department’s activities in the lead-up to and during Ireland’s Presidency of the EU from January to June 2013. The officer was re-engaged on a pension abatement basis, meaning that he continues to receive his pension and is paid a correspondingly reduced salary by the Department. This temporary recruitment arrangement is in line with a Government decision of 16 December 2011 relating to Presidency matters, including staffing arrangements. The policy of my Department regarding the re-hiring of retired officials is to do so to the minimum extent possible. However, for certain once-off or short-duration projects, it is more productive and cost-effective to re-hire retired staff who already have the relevant expertise and experience than to go through a time-consuming and relatively expensive recruitment, induction and training process. There are no State agencies, offices or bodies under the aegis of my Department.
185. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide the full list of budgetary information, not the actual data, which will be sent to foreign individuals and or groups, for example the IMF, ECB, the European Commission, the German Parliament, before being seen by Dáil Éireann, including for each one, the name of the person or organisation, the type of information which will be sent, the date it will be sent and the agreement treaty it is being sent under; and if he will make a statement on the matter. [48008/12]
View answerThe final details of the budget are decided by the Government and are not made known to individuals or groups outside the Government system until budget day. As the Deputy will be aware, we are in a programme of financial support with the EU and the IMF. The programme documents include a commitment to publish a budget to achieve a specified level of consolidation. The commitment provides broad indications of how this is to be achieved. As part of our programme, we are obliged to share some information with the EU Commission, the ECB and the IMF – the external partners, especially during the quarterly review missions. In this context, the continuing conditions listed at the start of the memorandum on specific economic policy conditionality include the following provision:
"To facilitate programme monitoring, the authorities will provide the European Commission, the ECB and the IMF with:..... All information required to monitor progress during programme implementation and to track the economic and financial situation." Such information is shared on a confidential basis, with the understanding that its circulation is restricted. This includes technical information on the options for revenue and expenditure measures which could be considered to meet the fiscal consolidation targets already specified. Any such options are clearly signalled as being subject to Government decision. This information flow is part of the process needed to facilitate the evaluation of the performance to date, and also, to provide assurance to the EU, ECB, and the IMF that there are options available to enable us meet our commitments.
The quarterly review process is an integral part of our financial support programme. The process starts with a review mission and ends with consideration and approval by the EU (Commission and Council) and the IMF executive board. Following each review mission the external partners and the Irish authorities agree updated programme documents, specifically the letters of intent, the memorandum of understanding on specific economic policy conditionality, the memorandum of economic and financial policies and the technical memorandum of understanding. Once finalised, the Letters of Intent are signed jointly by the Minister for Finance and the Governor of the Central Bank and are issued to the EU and the IMF, along with the accompanying programme documents. These documents are laid before the Houses of the Oireachtas and placed on the Department of Finance website following their transmission. In the event that these documents are issued prior to Budget Day, they will not include budget day details as mentioned above.
186. Deputy Finian McGrath asked the Minister for Finance his views on correspondence regarding pension tax breaks (details supplied). [48152/12]
View answerThe correspondence referred to in the question is from an individual who is concerned about reductions in the current tax relief available on pension contributions. No decisions have been made in this matter and I will bear in mind the concerns expressed in the context of any decisions that may be made in the future.
187. Deputy Terence Flanagan asked the Minister for Finance if he will intervene to stop the pensions levy being charged on retired members (details supplied) of the Electric Supply Board pension fund; and if he will make a statement on the matter. [48625/12]
View answerThe pension fund levy applies at a rate of 0.6% per annum to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation. The levy will operate for a period of four years only (2011 to 2014) and the legislative provisions giving effect to the levy (section 4 of Finance (No 2) Act 2011) were specifically drafted to reflect this.
The moneys raised from the pension fund levy are being used to pay for the Government’s Jobs Initiative introduced in May 2011. The measures introduced as part of the Jobs Initiative include a new 9% VAT rate on certain activities, the halving of the lower rate of PRSI and small amounts of additional current and capital expenditure.
The implementation of a jobs and growth strategy is a key priority of the Government. The measures announced in the Jobs Initiative are aimed at assisting in employment generation – providing opportunities for those who are out of work, to restore public morale and confidence in the economy and encourage spending by consumers.
The chargeable persons for the levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled, where they decide to do so, to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible. I cannot intervene in this process in respect of the ESB pension fund or other pension funds.
However, the legislation also includes safeguards aimed at ensuring that benefits payable, either currently or prospectively to any member, are adjusted in such a way that the reduction in value of those benefits shall not exceed 0.6% of the market value of the assets accounting for the scheme’s liabilities to that member.
I am conscious of the concerns of pension scheme members about the impact of a levy in circumstances where the pensions sector, in common with other sectors in our economy and society, is finding the current economic and financial environment very challenging. However, much of the value of pension funds is attributable to the rolled up value of generous tax reliefs that pension savings have historically been granted and continue to receive. The imposition of the levy is for a relatively short period and its purpose is to improve the economic environment by providing the means to encourage job creation in areas of our economy most likely to deliver that employment quickly.
188. Deputy Sandra McLellan asked the Minister for Finance if he will ensure greater equity in pension tax arrangements; and if he will make a statement on the matter. [48688/12]
View answerThere are a number of significant challenges currently facing pensions systems across Europe and in Ireland. As the populations of most EU countries are aging, issues around pension sustainability and adequacy mean that effective retirement age and the need for longer working in particular have come to the fore. In Ireland, there are currently six people of working age for every pensioner and this ratio is expected to decrease to approximately two to one by 2050. People aged 65 years and over will account for a greater proportion of the population while the proportion of working age is expected to decline. People are living longer with healthier lives and growing numbers of people want to work, or may need to work beyond State pension age. This has obvious and significant implications in relation to the future costs of State pension provision. Therefore, the task of financing increasing pensions will fall to a diminishing share of the population.
With these challenges and opportunities in mind, earlier this year, the Government asked the OECD to examine Ireland’s overall pension policy in light of the economic downturn and to ensure that it meets the needs of future generations. The review, which began in April of this year, encompasses the totality of pension provision in Ireland i.e. state, private, occupational and public sector. The review takes account of the programme for Government commitments in the pensions area, including tax reliefs and the commitment to cap taxpayers’ subsidies for pension schemes, (including politicians’ pension schemes), that deliver income in retirement of more than €60,000. The review will focus in particular on the commitment on universal coverage, and is also informed by developments at EU level in relation to pensions.
The OECD will report on the sustainability of the pension system in the light of demographic and investment challenges; the adequacy and coverage levels, in order to ensure adequate income in retirement with a particular focus on the lower and middle income group; the modernity of pension systems to ensure flexibility in the labour market and supporting mechanisms for longer working, and equity within the pension system.
In addition to this overall review, the Government has, since coming into office, introduced a number of key pension reforms:
Legislation was introduced in the Social Welfare and Pensions Act, 2011 to abolish the State pension (transition) with effect from January 2014 thereby standardising pension age at 66. The State pension (contributory) age will be increased to 67 in 2021 and to 68 with effect from 2028.
Further changes to State pension include changes to rate bands; to align the rate of pension paid with the contribution made ensures that those who contribute more during a working life benefit more in retirement than those with lesser contributions.
Significant changes to occupational pensions, specifically defined benefit pension provision have also been introduced:
Legislation introduced in 2011 provided for a sovereign annuity as an option for pension schemes. In August, the National Treasury Management Agency, NTMA, announced details of the sale of over €1 billion of Irish amortising bonds which were purchased by pension schemes and welcomed pension funds into the economy.
The regulatory structure for defined benefit pension schemes has been re-introduced. Legislation enacted during the year strengthened the Funding Standard by introducing a requirement for schemes to develop a risk reserve from 2016 and to meet the reserve requirement in 2023 with a view to ensuring greater security for pension scheme members and giving pension schemes increased protection from market volatility in the future.
The "Report on Pension Charges in Ireland 2012” was recently published by my Department with support from the Central Bank and Pensions Board. This report, which is a fact finding report, has concluded that there are serious challenges in relation to the reasonableness and transparency of the pension changes. Comments from interested parties and stakeholders are being invited over a three month period (i.e. by the end of January 2013). These responses will be considered and a further policy and regulatory response, if necessary, will be brought to Government.
189. Deputy Thomas Pringle asked the Minister for Finance if he will provide the number of tax credits and reliefs available to taxpayers; the number of taxpayers that have availed of these; and if he will provide a breakdown of the total cost of these credits and reliefs. [47218/12]
View answerAs regards tax reliefs currently available, a comprehensive summary of these was provided recently in my reply to Dáil Question No. 197 asked on 23rd October 2012. That reply contains details, as advised to me by the Revenue Commissioners, of the total identifiable costs to the Exchequer relating to income tax and corporation tax allowances, reliefs, exemptions and tax credits available and the numbers of taxpayers availing of them. The information relates to 2008 and 2009, the most recent year for which the necessary detailed information is available.
190. Deputy Dara Calleary asked the Minister for Finance the reason first time house builders are being treated differently to first time house buyers in terms of availing of mortgage relief; and if he will make a statement on the matter. [47260/12]
View answerThe position is that a residence under construction may have various payments made throughout the course of construction in respect of which money may have been borrowed (e.g. on the purchase of the site and at various stages of the construction). On the understanding that the residence under construction will, when completed, become the individual’s sole or main residence, tax relief is generally afforded on the interest paid on monies used to purchase the site and on interest paid on monies used to fund various stages of construction. However, where the residence when completed does not become the sole or main residence of the individual, any tax relief granted on interest paid will be recouped.
As the Deputy is aware, tax relief on interest paid on all qualifying home loans is being phased out. Tax relief on interest paid on qualifying home loans taken out in the period 1 January 2004 to 31 December 2012 will continue up to and including the 2017 tax year. However, tax relief is not available on interest paid on loans taken out on or after 1 January 2013. Likewise, where a residence is under construction, only the interest paid on monies drawn down on or before 31 December 2012 will qualify for tax relief.
A qualifying loan for mortgage interest relief is one which without having been used for any other purpose, is used in purchase, repair, development or improvement of a claimant’s principal private residence.
As with all time-limited reliefs, there will always be people who just miss out, and that is why I have been as flexible as possible with the legislation within the current budgetary constraints. However, I do not intend to extend the parameters of mortgage interest relief any further.
191. Deputy Peadar Tóibín asked the Minister for Finance he total amount of vat collected at 13.5%, over the most recent year for which figures are available, for each of the following items; beauty treatments, massages, nail treatments, tanning or sunbed services, routine cleaning of residential property, non-oral contraceptive products, non-residential property building services related to non-residential property, including installation, routine cleaning of non-residential property, photographic services including photographic prints, works of art, antiques and literary manuscripts, cosmetic surgery, tattoo artists, tree surgery, valet cleaning of cars, collectors items and faith healers. [47271/12]
View answer192. Deputy Peadar Tóibín asked the Minister for Finance the total amount of vat collected at 9%, over the most recent year for which figures are available, for each of the following items, green fees, membership of commercial and local government golf courses, admission to lap dancing, hot take away food and hot drinks, fair ground amusements and hair dressing. [47272/12]
View answer193. Deputy Peadar Tóibín asked the Minister for Finance the total value to the economy of golf club membership fees; transactions of investment gold; hire of chauffeur driven vehicle; air craft leasing and directors fees; and the amount of VAT raised on these transactions. [47273/12]
View answerI propose to take Questions Nos. 191 to 193, inclusive, together.
I am informed by the Revenue Commissioners that it is not possible to furnish figures of the VAT take from the goods and services specified, as the information furnished on VAT returns does not require the yield from particular sectors of trade to be identified.
I am further advised by the Revenue Commissioners that some of the items described by the Deputy may not be solely liable at the VAT rate mentioned. For example, green fees and golf membership fees may be exempt from VAT or liable to VAT at the 9% rate depending on the nature of the golf club and the supply of the services of an intermediary in relation to investment gold could be a VAT exempt financial services transactions in certain circumstances.
Equally for example, non-residential property building services related to non-residential property, including installation, could include items that are liable to VAT at the 23% standard rate in certain circumstances.
Furthermore, with regard to the value to the economy of golf club membership fees; transactions of investment gold; hire of chauffeur driven vehicle; air craft leasing or directors fees, the CSO does not provide a breakdown of economic activity by this level of disaggregation.
194. Deputy Terence Flanagan asked the Minister for Finance if he will respond to the following query (details supplied) regarding bankers salaries [47278/12]
View answerA review of remuneration practices and frameworks at the State supported banks – a programme for Government commitment - is presently underway. I have noted the concerns raised by the Deputy’s constituent in relation to bankers pay in that context.
195. Deputy Pearse Doherty asked the Minister for Finance further to reports that Allied Irish Banks, in which he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, if he will confirm the sale price of portfolio; if AIB will book an additional loss on the sale compared with the existing book value of the loans net of provisions, and if so, the quantum of the additional loss. [47279/12]
View answerThe sale of loan portfolios is a commercial matter for the management and the board of the bank. I do not have a role in this function. AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660m nominal of loan assets as part of its continuing strategy to meet its non-core deleveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.
The sale price is a matter of confidentiality between the parties. It is normal course of practice that sales processes are conducted under appropriate confidentiality constraints in order to protect the interests of all parties.
AIB is satisfied that it has maximised value for the bank and its stakeholders as the portfolio was sold following the completion of a comprehensive two stage competitive auction sales process involving a number of credible international investors.
This transaction facilitated the deleveraging of a substantial non-core portfolio and subject to completion of closing conditions is expected to close prior to year end.
This sale brings AIB’s total net non-core deleveraging to date to 80% of AIB’s three year PLAR deleveraging target of €20.5 billion. AIB remains on course to complete the majority of its total 2013 deleveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.
