Vol. 443 No. 6
3 Mr. Yates asked the Minister for Finance when the Government will decide upon the proposed merger between National Irish Bank and the Trustee Savings Bank; the other offers, if any, that will be considered for the sale of the Trustee Savings Bank; and the steps, if any, the Government is taking to involve the ACC and the ICC in any proposed merger as set out in the Programme for a Partnership Government, 1993 to 1997.
21 Mr. Rabbitte asked the Minister for Finance the commercial interests he has met to discuss a possible purchase of the Trustee Savings Bank; the outcome of any such discussions; if the Government remains committed to the concept of a third banking force from within the State sector, as promised in the Programme for a Partnership Government, 1994 to 1997; the role he envisages for the Trustee Savings Bank in such a third banking force; and if he will make a statement on the matter.
38 Mr. Gilmore asked the Minister for Finance if he has received any offer or inquiry from National Australia Bank to purchase ICC, ACC and the Trustee Savings Bank; if so, his response to this offer in the context of the Government's commitment to the establishment of a third banking force; and if he will make a statement on the matter.
40 Proinsias De Rossa asked the Minister for Finance the plans, if any, the Government has to promote the development of An Post in the banking area; and if he will make a statement on the matter.
I propose to take Questions Nos. 3, 21, 38 and 40 together.
As I stated in this House on 4 May 1994 in response to a question on the Adjournment from Deputy Yates, the board of trustees of Trustee Savings Bank has asked me to authorise and effect the reorganisation of Trustee Savings Bank into an independent company pursuant to section 57 of the Trustees Savings Banks Act, 1989, by transferring the assets, liabilities and business of Trustee Savings Bank into National Irish Bank Limited, a subsidiary of National Australia Bank Limited, in return for a payment to the Exchequer and the trustees being satisfied that the proposed merger places a very high priority on employment. I also informed the House that the recommendation of the trustees was given preliminary consideration by the Government on 4 May last. It was decided that as this was a very complex issue I should consider the recommendation from the trustees in the context of Government policy on the banking and financial sectors and also in the context of emerging developments in the financial markets generally. This examination is currently under way. I expect to be in a position later this month to make a preliminary report to Government on the general background facing Irish credit institutions.
Regarding the steps being taken to involve ICC Bank and ACC Bank in any merger as set out in the Programme for a Partnership Government, the position is that my examination of the recommendation from the trustees is taking place in the context of Government policy on the banking and the financial sectors and also in the context of emerging developments in the financial markets generally. I have obtained Government approval to call on the services of financial consultants to advise me in relation to the options available to the Government. Arrangements are currently under way to invite tenders from suitable firms of consultants, domestic and foreign. This will ensure that I have the appropriate level of expertise available to me at all times during the course of the examination.
When I have completed my examination I will again report to Government. The Government, having considered my report, and taken into account the options available, will then decide on the most appropriate response to the recommendation from the board of Trustee Savings Bank.
The Programme for a Partnership Government envisaged the merging of ICC Bank and ACC Bank, and seeking a merger of the new entity with the Trustee Savings Bank. It also envisaged the development of strong links with the network of An Post for money transactions and banking services. The programme also included the possibility of involvement with a major international bank. While the programme outlined a particular approach to this the actual process required to give effect to it had not been examined in detail at that stage. The commitment to the creation of a third banking force to enhance competition and to cater for the specific needs of small and medium-sized enterprises remains and, as I indicated, this will be a central part of my examination.
In the context of the programme but not dependent upon it, work on computerising the busiest post offices nationwide is ongoing, with equipment installed in 200 out of a planned 600 post offices and with a target of 325 by year end. Facilities at these 600 post offices, which cater for over 80 per cent of counter-business customers, are also being upgraded. This refurbishment programme is being implemented on a phased basis, 250 having been completed to date and the balance due for completion by year end.
Regarding the question of other offers for Trustee Savings Bank, I have not been advised by the bank of any offer other than that of National Australia Bank. No offer has been made directly to me. Consideration of any other offer that may be received for Trustee Savings Bank must be governed by the same considerations as apply to the bid by National Australia Bank. Trustee Savings Bank is not a State bank like ACC Bank and ICC Bank: it has no shareholders, and the Government does not appoint the trustees. Any proposals to change the status of the bank, or to transfer its assets, liabilities and business to a third party, are a matter in the first instance for the board of trustees.
I have received no offer or inquiry from National Australia Bank apart from that arising from the recommendation from the trustees of Trustee Savings Bank. However, in the course of my initial consideration of the recommendation from the trustees I met representatives of National Australia Bank. My discussions with them took place in the context of the Programme for a Partnership Government. During those discussions they indicated that they do not rule out the inclusion of ICC Bank in their future plans and neither do they rule out a minority State shareholding. As I indicated, the Programme for a Partnership Government requires the creation of a competitive banking system and also one that will support industry and jobs and in that context the particular needs of small and medium-sized enterprises which is of vital importance. ICC Bank has 60 years' experience in successfully providing services to this sector. Therefore, the inclusion of ICC Bank in any third force would help ensure that the needs of small and medium-sized enterprises would be fully catered for.
I also met representatives of Ulster Bank, and its parent, National Westminster Bank, who have expressed an interest in acquiring Trustee Savings Bank, and they expressed views similar to National Australia Bank on the questions of involvement by ICC Bank and State participation. Since I received the recommendation from the trustees of Trustee Savings Bank these are the only two groups I have met though others have been reported by the media as having an interest. It is of course open to interested parties to approach the banks involved directly for the purpose of getting preliminary information on their current business operations.
I was also notified yesterday by Irish Nationwide Building Society that it has informed the trustees of Trustee Savings Bank of its interest in entering into negotiations for the acquisition of the bank.
When I have fully examined the recommendation from the trustees of Trustee Savings Bank and the Government has had an opportunity to consider my report on it and the other options available, then I will be in a position to say what actions we need to take on foot of the Government's decisions. In the meantime, speculation about what the Government might or might not decide serves no useful purpose.
Will the Minister agree that the promise made in the Programme for a Partnership Government to set up a new super State bank is completely different from the third banking force now envisaged? What is now envisaged is a private sector third banking force as opposed to a State sector third banking force. Will he also clarify whether, under their terms of reference, the consultants will examine not only the NIB offer but the Ulster Bank offer, the Woodchester offer and the Irish Nationwide offer? Has he given those other interested parties a commitment that he will consider entering into discussions with the Trustee Savings Bank to ensure there is an open and fair competitive basis so that the best offer will be accepted?
The answer to the Deputy's first question is that at the time the Programme for a Partnership Government was agreed we had not worked out, in detail, how the system would work but we wanted to have some State involvement. The idea was that ACC and ICC would go together, followed by the Trustee Savings Bank and then an outside partner. Since the reality is that ICC and ACC do not want to be together at board, executive, staff and trade union levels, a view which has been well aired in the media and elsewhere during the past year or so, the Government has to look at other options. Although I cannot force any position on the trustees of the Trustee Savings Bank, if others are interested we will take their statements into account but I cannot give any commitment as to how Trustee Savings Bank will view that. I agree with Deputy Yates that in our examination and in whatever happens ultimately we should take account of the views of all those who have expressed an interest.
What timetable does the Minister envisage for the completion of the consultancy reports? As an order of the Dáil is required to sell the Trustee Savings Bank, does he envisage the reports will be complete before the summer recess? In view of the fact that the Government must approve the order, surely the Minister is in a position to insist that tendering should be open and fair so that the best offer will be approved by the House.
As stated, I have had no other offer but I have suggestions from one organisation, a letter from another and major reports about another. I will raise the views of those organisations with the board of the Trustee Savings Bank but I cannot force them to accept. It is my intention to appoint a consultant as quickly as possible and to proceed with the examination. Before bringing a proposal before the House — I do not want to presuppose that we have agreed to sell anything — we will examine it in the context of the Programme for a Partnership Government. It will be the next session before we bring forward proposals.
