Thursday, 7 March 2013

Questions (77)

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the current value ascribed to each of the State's investment holdings in Bank of Ireland and Allied Irish Bank; and if he will make a statement on the matter. [12252/13]

View answer

Written answers (Question to Finance)

As previously disclosed the gross bank recapitalisation commitments made by the State in Allied Irish Bank (AIB) and Bank of Ireland (BOI) to date are set out in the following table:

€bn

AIB/EBS

BOI

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

-

0.9

Ordinary Share Capital (2010) - NPRF

3.7

3.7

Total pre-PCAR 2011 (A)

8.1

3.5

11.6

PCAR 2011:

AIB/EBS

BOI

Total

Capital from Exchequer**

3.9

-

3.9

NPRF Capital

8.8

1.2

10.0

Total PCAR (B)

12.7

1.2

13.9

Total Cost of Recap for AIB & BOI (A) + (B)

20.7

4.7

25.4

* €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). In addition the State received €1.1bn stock coupons from BOI and AIB relating to the Government Preference shares.

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

As the Deputy will be aware, the State successfully disposed of the €1.0 billion Contingent Capital instruments in Bank of Ireland in January 2013 at a profit of €10m, while previously we received €0.5bn from the sale of our warrants in the bank. These disposals and other receipts from dividends and coupons are not reflected in the headline figures shown in this table. The State’s remaining investments in these two banks consist of a 99.8% equity stake in AIB, a 15% stake in BOI, preference shares with a nominal value of €3.5bn in AIB and €1.8bn in BOI and Contingent Capital in AIB of €1.6bn.

The most recent valuation of these holdings is contained in the NPRF 2011 Annual Report published on the 19th July 2012. As at the 31st December 2011, the NPRF valuation of its investments in AIB was €6.1bn, comprising preference shares of €2.2bn and ordinary shares of €3.9bn (the Contingent Capital is held by the Minister directly). Its investments in BOI were valued at over €1.8bn consisting of preference shares of almost €1.5bn and ordinary shares c.€0.4bn.

The value of the State’s remaining bank investments is understood to have improved since then as evidenced by the recent strength in BOI’s share price. As of 5th March 2013, it was at 14c per share versus 8c at the end of 2011.

Table from NPRF Annual Report

Directed Portfolio 31 December 2011

Valuation €m

% of Directed Portfolio

Allied Irish Banks

3,500 million preference shares

2,224

27.9

513 billion ordinary shares

3,896

48.9

Total Allied Irish Banks

6,119

76.9

Bank of Ireland

1,837 million preference shares

1,473

18.5

4,512 million ordinary shares

370

4.6

Total Bank of Ireland

1,843

23.1

Cash

0

0

Total Directed Portfolio

7,962

100.0

Figures may not total due to rounding

Source: NTMA