Dáil Éireann Debate, Tuesday - 28 February 2017
196. Deputy Joan Burton asked the Minister for Finance if he expects that the State will still move to sell off all or part of a bank (details supplied); the estimated timeframe for this; the expected yield to the Exchequer; if this yield will be ring-fenced for a particular purpose; and if he will make a statement on the matter. [9936/17]
Amharc ar fhreagraAs the Deputy is aware, the Programme for Partnership Government allows for the sale of not more than 25% (plus over-allotment opion) of any bank before the end of 2018. The State's shareholding in AIB is a very valuable asset and it is the Government's intention that the State will exit this and our other banking investments in a measured and careful manner. My primary objective in the disposal of any AIB shares will be to maximise the return for the State in a manner that is consistent with recovering our full €20.8bn investment over time.
The advice I have received confirms that an IPO is the optimal route to recouping value from this investment. Officials in my Department along with our Independent Financial Advisor, Rothschild, have done considerable preparatory work in this regard. In December of last year, following a competitive procurement process, three firms were appointed to act as Global Coordinators on a potential selling syndicate, in preparation for a possible IPO. These firms have been appointed for an 18 month period and additional firms will be appointed to fill out the selling syndicate at an appropriate future date.
I cannot predict what market conditions will be like for bank shares over the coming year, however it is our intention to be ready to execute a transaction if conditions allow and I have indicated that the earliest possible IPO window will be in the second quarter of 2017. Given the improved state of the national accounts, progress made in reducing our national debt and positive market sentiment towards Ireland, we are not under any pressure to monetise our banking investments. As a result we have some flexibility around when we time our disposals in the market.
It would not be possible or prudent for me to estimate the amount which might be received from any future sale of shares in AIB at this time. This will depend both on the quantum of shares sold and the price arrived at in the market during the IPO process.
As I have previously indicated, all capital returned from the State's investments in the Irish banks will be used to reduce the national debt. That is the prudent course of action as it reduces our ongoing borrowing costs and ensures the future strength and stability of the economy.
