Dáil Éireann Debate, Tuesday - 27 September 2016
192. Deputy Michael McGrath asked the Minister for Finance the timeframe for the sale of the State's share in a bank (details supplied); if that timeframe has been revised in view of Brexit; and if he will make a statement on the matter. [26955/16]
View answerAs the deputy is aware, the State has a shareholding of 99.9% in AIB. This shareholding is a valuable asset to the State and it is the Government's intention that the State would exit this and our other banking investments in a measured and careful manner. As I have indicated on a number of occasions, my primary objective in the disposal of these assets will be recovering the maximum amount of money for the Irish taxpayer.
I have indicated in the past that an IPO is likely to be the optimal route to recouping value from our investment in AIB. At the beginning of this year officials in my Department appointed an Independent Financial Adviser, following a tender process, to assist with analysis and exit planning and much of this initial preparation has now been completed. However, given the complex nature of an IPO process, the need to access certain IPO 'windows' and the recent volatility seen in stock markets, I would now deem it more likely that a market event involving AIB would occur in 2017, rather than 2016.
I would acknowledge that the bank is now ready to participate in a market event at a time of my choosing and welcome the continued strong performance of AIB, which has demonstrated sustainable profitability and capital generation over a number of consecutive reporting periods. I would also note the recent comments made by the bank's chairman indicating that AIB may be approaching the time when the board will be in a position to consider the payment of a prudent dividend, in consultation with their regulator, which would contribute to a strong investment case for the bank.
While Brexit is obviously a significant factor behind the weakness and volatility we have seen in banking equities this year, wider concerns around the future of banking business models, a prolonged period of low and negative interest rates, as well as uncertainty around the strength of global economic growth, are also at play. Clearly in order for us to proceed with an IPO, we would need to be satisfied that the market is prepared to put a fair and reasonable value on the business, bearing in mind its current performance and future prospects along with the outlook for the Irish economy. As part of their day-to-day role, officials in my Department will continue to monitor market conditions and keep all options relating to AIB and our other banking investments under review.
