Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The State has already executed the successful disposal of some of its investments in the banks. Last year the State completed three transactions, namely, the sale of our CoCo and preference share investments in Bank of Ireland, and our investment in Irish Life. These disposals generated total proceeds of €4.45 billion.

AIB and Bank of Ireland are at different stages in their recovery and this influences the relative attractiveness of each bank to the investor community and its consequent valuation. Bank of Ireland is the more advanced of the two and this provided us with the opportunities we chose to avail of last year. Following the monetisation of the preference shares in December 2013, our remaining investment in Bank of Ireland comprises our 14% equity holding. The market value of this holding, at the current share price of 33 cent, is €1.5 billion. As I stated recently, any decision to sell this stake will be a question of price. Officials in my Department continue to monitor market conditions and advise me in this regard.

With reference to AIB, I am encouraged by the progress the bank is making. Our first priority is to see it return to profitability and address its legacy issues. This should, in time, enable the State to be in a position to exit part of its investment in the bank should we wish to do so. As I said recently, the Government might look to "test the market" before the next election in order to establish a valuation for the bank. Officials within my Department have extensive banking and capital markets experience both from previous roles in the private sector and from work done for the State during the crisis. Hence they are well qualified to assess suitable opportunities and strategies to dispose of the State's remaining bank investments. In addition, these officials meet regularly with internationally renowned investment banks to discuss relevant market intelligence relating both to the Irish banks and international banking developments in general.

My officials also meet with international institutional investors to gauge their interest and investment criteria.  Notwithstanding this, I will consider the need for specialised financial advice when I need additional market-based advice to strategise how to best dispose of our investments arise.

Additional information not given on the floor of the House

I meet regularly with the boards of both banks, including the public interest directors. The agenda for these meetings tends to cover a wide range of issues, including our thoughts in regard to our bank investments.

Finally, it is premature to speculate on the use of the proceeds from any future investment disposals. Notwithstanding this, any decision regarding the use of disposal proceeds will be made in the best interest of the taxpayer.

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