Michael Noonan (Limerick City, Fine Gael)
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Impaired banks all over Europe have been disposing of impaired loan books. The sale of 25% of AIB and what it might do with its impaired loan books is not connected. I am aware that AIB is examining the possibility of selling a loan book but my understanding is that loan book is in the main buy-to-rent rather than private mortgages. The big problem with vulture funds is their names. The Deputy will have seen articles in the newspapers to the effect that some of the vulture funds have more discretion to do deals with people than the banks have. I cannot vouch for that. If a bank writes off bad debt, it is crystallising bad debts on its books, bringing it forward and crystallising upfront whereas if somebody buys a loan book for 50 cent on the euro, then that person has a 50 cent head run to negotiate a settlement with the borrower. There are mixed views about this, which I admit, but there is publicity in both directions in the newspapers.

The credit servicing legislation is in place. Under law, the same obligations apply to the purchaser of loan books as applies to the original loaner of the loan books. The Central Bank is a vigilant regulator and it keeps a close on what is happening. In regard to the proposed privatisation of AIB, my intention is to sell around 25% of it. I would not be in a hurry to put the remainder of it on the market. I was talking recently to my former Swedish colleague about the Swedish banking crisis in the early 1990s. Sweden only sold off the last tranche of shares in the banks in 2015. By holding on to them for a time, they recovered, in nominal terms, about three times what they had invested.

It is a long game and my successors will deal with the matter. I am not certain we are going ahead with 25% this year. We have started a process but there is no compulsion on us from a debt management point of view or anything like that to sell. It is not like it was four years ago when Europe said we had to sell assets to get debt down. It is not like that. This is totally discretionary. We will only sell if we think we will get full value for the shares. If we do not sell then someone else will in the future.