Thomas P. Broughan
Question:39. Deputy Thomas P. Broughan asked the Minister for Finance his position on retaining the State's shares in Bank of Ireland, Allied Irish Bank and Permanent TSB. [15984/14]
View answerTuesday, 8 April 2014
Questions (39)
Written answers
I have stated in the past that I do not see the State as a long-term investor in the banking sector and I am keen to return the banks to private ownership at the appropriate time, having considered the overall interests of the taxpayer.
The State has already executed the successful disposal of some of its investments in the banks. Last year the State completed three transactions the sale of the CoCo and preference share investments in Bank of Ireland, and our investment in Irish Life. These disposals generated total proceeds of €4.45bn.
The banks are at different stages in their recovery and this influences the relative attractiveness of each bank to the investor community and their consequent valuation. Bank of Ireland is the most advanced of the banks and this provided us with the opportunities we chose to avail of last year.
Following the monetisation of the preference shares in December 2013, our remaining investment in Bank of Ireland comprises our almost 14% equity holding. The market value of this holding, at the current share price of 32c per share, is c.€1.4bn. As I have stated recently, any decision to sell this stake will be a question of price. Officials in my Department continue to monitor market conditions and advise me in this regard.
With reference to AIB, I am encouraged by the progress the bank is making. Our first priority is to see the bank return to profitability and address its legacy issues. In time this should enable the State to be in a position to exit part of its investment in the bank should we wish to do so. As I have said recently, the Government might look to "test the market" before the next election in order to establish a valuation for the bank.
The potential involvement of a strategic or capital market based investor for Permanent tsb ("PTSB") will be considered at an appropriate time having regard to the best interests of the State. My officials and PTSB are in regular contact regarding matters such as capital structure and will consider all potential strategies in this regard.
In the meantime PTSB continues to work to enhance the value of our investment through the continued delivery of the restructuring plan, which will, if delivered, provide the State with more optionality regarding the future structure of PTSB. Key activities include a return to meaningful lending and material progress in resolving arrears in mortgages and commercial real estate.