As the Deputy is aware, the relationship between the Minister for Finance and banks in which the State is a shareholder is governed by Relationship Frameworks, which can be found on my Department's website. In accordance with these Relationship Frameworks, I as Minister for Finance have no direct function in commercial decisions made by the banks, these decisions are the responsibility of the Board and management of the relevant institution. Notwithstanding the State's shareholdings in the banks, I must ensure the banks are run on a commercial and independent basis to protect their value as an asset to the State.
Notwithstanding the above, much of the information requested by the Deputy is not held within my Department. I would also suggest that the information requested is commercially sensitive, and I would not expect commercial organisations to publicly disclose information that would give advance notice to the market of their operational or strategic intentions.
To my knowledge, the banks in which the State is a shareholder are not in the practice of disposing of performing assets, and so I would expect any future disposals to be non-performing loans. As the Deputy will know, non-performing loans remain at an elevated level across the European banking system and addressing this issue is one of the key priorities for the Single Supervisory Mechanism (SSM).
In Ireland, significant progress has been made across the banking sector in reducing the level of non-performing loans since the financial crisis. Despite this progress, the level of such loans in here remains well above the European average. Hence, the SSM has tasked the management and board of each institution with developing and implementing a strategy to address this challenge. This challenge will have to be met irrespective of whether the State has a shareholding in the bank concerned or not.
In recent years Irish banks have introduced multiple engagement channels to facilitate those customers who are reluctant to engage directly with them. Having exhausted these initiatives, if meaningful engagement is not forthcoming from particular customers the bank may be left with no option but to look at alternative solutions which could, as a last resort, include the sale of the loan.
I have received the following comments on the Deputy's question.
"Since 2013, AIB has reduced impaired loans from c. €30bn to €7.8bn at 30th June 2017, the vast majority, through case by case restructuring of personal and business customers in difficulty. AIB continues to have high levels of NPLs versus its European peers and has developed plans to reduce these levels over the medium term to address this risk and also to meet its regulatory requirements. In April 2017, AIB entered into a binding contractual agreement to sell an investment portfolio of impaired Buy-to-Let originated mortgage loans with a value of c.€200m.The majority of these loans are in deep long term arrears. A portfolio of UK based impaired unsecured loans was also sold in May 2017. The Bank continues its focus on supporting our customers in financial difficulty by actively implementing sustainable solutions to keep viable businesses operating and customers who engage with us in their homes where possible.
For commercial reasons the bank is unable to outline any specific details or plans at this stage."
“The Bank is in the process of appointing an advisor to assess and assist on potential loan sales. No final decisions have been made at this stage.”