State Banking Sector

Dáil Éireann Debate, Wednesday - 16 January 2013

Wednesday, 16 January 2013

Ceisteanna (206)

Kevin Humphreys

Ceist:

206. Deputy Kevin Humphreys asked the Minister for Finance if, in respect of Allied Irish Bank, he will outline the amount of public money invested by the State in the bank since 2008; the fees paid by the bank for the various deposit guarantees since then; the other sums paid by the bank to the State for repurchase of warrants and any other fees; the preference share and contingent capital holding and the coupon rate; the amount that has been paid so far and the amount to be paid in future; and if he will make a statement on the matter. [1916/13]

Freagraí scríofa

Minister for Finance

I can inform the Deputy that the table details the amount of public money invested and sums paid by Allied Irish Bank since 2008.

Cash invested by the State	-	€ billion
Government Preference Shares - NPRF		3.5
Contingent Convertible Capital Notes		1.6
Capital - NPRF		12.5
Capital - Exchequer		2.3
Capital contributions (Promissory Notes /Special Investment Shares) - Exchequer		0.9
Total		20.7
Fee Type	Note	€ billion
Guarantee Fees (both ELG and CIFS)	1	1.3
Interest on Contingent Convertible Capital notes		0.16
Re-purchase of AIB Warrants	2	0.05
Total		1.5

Notes:

1) 2012 Exceptional Guarantee fees are the fees paid up to 31/12/2012 and excludes €1.2 million in legal and admin costs.

2) AIB’s warrants were cancelled on 23 December 2010 for consideration of €52.5m paid to the NPRF.

3) The recharge of legal costs of €6.1m received from AIB are excluded from the above table.

AIB’s €1.6bn of Contingent Convertible capital notes were issued on 26 July 2011 for a period of 5 years. These notes will convert or be exchanged into ordinary shares if either a Capital Deficiency or a Non-Viability event occurs as defined in the terms and conditions of the Contingent Convertible capital notes. These instruments carry a coupon of 10% or €160m per annum over the instrument’s life.

The 2009 Preference Shares pay a dividend at a rate of 8% per annum, payable annually in arrears at the discretion of AIB. Based on the nominal amount of €3.5bn of these shares currently outstanding, this equates to a dividend of €280m per annum.

If a cash dividend is not paid, AIB must issue bonus ordinary shares to the holders of the 2009 Preference Shares by capitalising its reserves. The State has never received a cash dividend on these instruments, with the Bank having to-date elected to issue bonus shares.

As the form of dividend to be paid on the 2009 Preference Shares is at the discretion of the Bank, I am not in a position to speculate on future payments.