Pearse Doherty
Ceist:346. Deputy Pearse Doherty asked the Minister for Finance the current value of shares held by the State in Irish banks; and when negotiations will begin in Europe on Irish banking debt. [39235/12]
Amharc ar fhreagraTuesday, 18 September 2012
Ceisteanna (346, 347, 348)
Pearse Doherty
Ceist:347. Deputy Pearse Doherty asked the Minister for Finance if this State will be setting a minimum value for which it is willing to sell Irish bank shares to the ESM, and if such a policy is to be pursued. [39236/12]
Amharc ar fhreagraPearse Doherty
Ceist:348. Deputy Pearse Doherty asked the Minister for Finance if a study has been undertaken to ascertain the long term economic value of current shares held by the State in Irish banks. [39237/12]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 346 to 348, inclusive, together.
On the 19th July 2012 the NPRF published their annual report. This contained a valuation of the NPRF’s ordinary and preference shareholdings in Bank of Ireland and Allied Irish Bank at 31st December 2011. As at the 31st December the NPRF valuation of its investments in Irish banks stood at €8 billion. Its investments in AIB at this date were valued at €6.1bn comprising preference shares of €2.2bn and ordinary shares of €3.9bn. Its investments in Bank of Ireland were valued at €1.9bn consisting of preference shares of €1.5bn and ordinary shares valued at €0.4bn. In addition, the State holds direct equity investments in IBRC and ptsb (now separated from Irish Life). The State also invested €3bn in contingent capital instruments across the banks which are scheduled to be repaid to the State in 2016.
Given that the State may enter discussions in relation to these investments, it would be inappropriate for me at this point to provide further details in relation to any valuation assessment of those instruments. I would acknowledge though, that since the end of last year, banking shares have rallied strongly across Europe and the share price of Bank of Ireland has benefited from this positive sentiment rising by c18%.
The very welcome Euro Area summit statement of 29th June represents a major shift in European policy in terms of breaking the vicious circle between the banks and the sovereign. More recently with the announcement of single EU banking supervision mechanism on the 12th September, the European Commission President has outlined his vision for the banking sector, in which the ECB would be given supervisory powers over all banks in the union which is an important step in relation to the ESM and its potential to recapitalise banks. As you aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt and further detailed work will be stepped up to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. This will be one of the Government’s key priorities between now and the end of the year.