Dáil Éireann Debate, Thursday - 16 July 2015
142. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the manner in which the acquisition of a credit union (details supplied) by Permanent TSB has proceeded; if he expects an additional liability to the State to arise in respect of the credit union; and if he will make a statement on the matter. [29739/15]
View answerOn November 2013, on foot of a request from the Governor of the Central Bank, I agreed to the payment to Permanent tsb (PTSB) of a financial incentive to support the transfer of Newbridge Credit Union Ltd (NCU), excluding its premises.
The maximum amount of financial incentive is €53.9 million, comprising:
- €23 million in cash up-front - paid in full.
- €4.25 million for restructuring and integration costs incurred by PTSB as part of the transaction - of which €2.5 million has been paid.
- €2 million for any liabilities transferred to PTSB that were not represented on NCU's balance sheet at the date of transfer - of which €0.3 million has been paid.
- a maximum additional €24.7 million to cover 50% of any impairment made on the loan book to bring its net value below €49.3 million. Equally, the Credit Institutions Resolution Fund is entitled to recoup 50% of any recoveries made on the loan book - there has been no loss compensation made to date.
In total, €25.8 million has been paid to date in financial incentive support in relation to the transfer of NCU to PTSB.
In accordance with Section 46(6) of the Central Bank and Credit Institutions (Resolution) Act 2011, once the sale of NCU's building has completed, the proceeds from the sale (net of transaction and liquidator costs) will be remitted to the Credit Institutions Resolution Fund. Under the Act, the Credit Institutions Resolution Fund is the principal creditor of NCU in the amount of financial incentive paid or payable to PTSB.
