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

AIB's return to profitability is good news from the perspective of the Irish taxpayer, as it enhances the value of the bank for the taxpayer. The last valuation of our AIB shares, which was carried out by the National Pensions Reserve Fund Commission, NPRFC, at the end of 2013, valued the State's ordinary and preference shareholding at €10 billion. Including the contingent convertible capital notes, or CoCos, that we hold, this brings the value of the State's shareholding to €11.6 billion. Since then, bank stocks in many eurozone countries have performed well, and with AIB itself performing strongly I would be confident that the current value of AIB is greater than the NPRFC valuation at the end of 2013.

Now that the bank has returned to profit, is on a stable path and has passed the ECB's comprehensive assessment, my officials will engage with the management team to explore how we can reconfigure the bank's capital structure to make it fit for purpose. The regulatory rules and expectations have changed dramatically in the past couple of years and we need to lay out a plan to position the bank for this new environment. As part of this process we hope to agree a roadmap that will see the bank start to return cash to the State so that we can begin the process of repaying the taxpayer's large investment.

With respect to the State's shareholdings or ownership in the banks, Government policy remains unchanged - namely, that we do not wish to hold these investments in the banks over the long term. Subject to market conditions, therefore, we are willing to exit in a manner that maximises value for the taxpayer. In the last 18 months the State has exited successfully from some debt investments with the sale of our CoCos and preference shares in Bank of Ireland, in addition to the sale of Irish Life. Given the significant cash resources we hold, we are not under any immediate pressure to exit our remaining investments. However, given where our national debt is, neither do we have the luxury of holding on indefinitely.

We are not making any decisions with regard to reducing our ownership in the bank now, because, as I have just outlined, we have important decisions to make about how we should best reconfigure our existing investments in a way that benefits both the bank and the taxpayer. That is our main priority in the coming months. If we can deliver on this work programme next year and everything else develops as we would like, then we may be at a point at which we can consider selling some of our shares.

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