Dáil Éireann Debate, Thursday - 9 July 2015
112. Deputy Thomas P. Broughan asked the Minister for Finance if he has given further consideration to the retention of Allied Irish Banks in the ownership of the people, given the commentary that at least one stable pillar bank should be owned directly or co-operatively by the people and given the appalling failure and collapse of the private banking sector from 2008-09; and if he will make a statement on the matter. [28082/15]
View answer113. Deputy Thomas P. Broughan asked the Minister for Finance if he will present Dáil Éireann with a detailed cost-benefit analysis on the future outcomes for Allied Irish Banks before any decision is made to sell this major asset of the people, and given the matters now being investigated by the commission of investigation into the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [28083/15]
View answerI propose to take Questions Nos. 112 and 113 together.
AIB is well on the road to recovery and officials in my department are working with AIB on reconfiguring its capital structure and setting out a path for the bank to begin to return capital to the State. Given the scale of the State's investment, amounting to some €20.8 billion, and the different financial instruments this money is invested in, there are a range of options available to recoup value from the bank and it is critical that we get these decisions right. As a result Goldman Sachs International and William Fry are assisting the Department with this work by providing financial and legal advice respectively.
Reconfiguring the bank's capital structure, which is no longer fit-for-purpose given the new regulatory regime, is just the start of the process, but it is an essential first step on the road to recovering value for the taxpayer. Discussions commenced recently with the SSM (Single Supervisory Mechanism) and the Central Bank, AIB's regulators, regarding AIB's capital structure and this process is expected to take a number of months.
No decision has been made by the Government to sell any of our investments in AIB. However, 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.
All options remain on the table and while I have said previously that an Initial Public Offering or IPO on the stock market looks like the most likely exit route for the State, it is too early to specify what steps will be taken or to put a timeline on decisions.
