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Banking Sector

Dáil Éireann Debate, Tuesday - 27 January 2015

Tuesday, 27 January 2015

Questions (217)

Joe Costello

Question:

217. Deputy Joe Costello asked the Minister for Finance his plans for selling the State’s interest in AIB; his plans to retain a shareholding in the bank; if so, the extent of the shareholding; and if he will make a statement on the matter. [3813/15]

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Written answers

As the Deputy will be aware the Irish banking system is now in a much stronger position than it was even a year ago. Profits are recovering, balance sheets have been restructured and we have started the process of returning cash to the taxpayer following the huge investments that were made over the 2009-11 period. 

Much of the banking-related work in the Department of Finance this year will focus on AIB. Given the scale of the State's investment - some €20.8 billion - and the range of options available to recoup value from the bank, officials within my department are working with AIB on reconfiguring its capital structure. Goldman Sachs International has been appointed to provide financial advice to the Department  in this regard.

The focus will be on ensuring that the best decisions are made regarding potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. While this is just the start of the process, it is an essential first step on the road to recovering value for the taxpayer. All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions.

As I have previously stated on numerous occasions, Government policy is that we will not remain a holder of our banking investments in the long term. Given our high debt to GDP ratio, we do not have the luxury of holding all of these investments indefinitely and I envisage receipts from the gradual sale of these investments helping to play their part in reducing the State's overall debt burden in the coming years.

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