Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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46. To ask the Minister for Finance his plans to privatise the State's shares in the banking sector; and if he will make a statement on the matter. [10025/17]

Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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AIB was the recipient of the second biggest bank bailout in the world - €20.7 billion – more than Morgan Stanley and Goldman Sachs combined, and second only to Anglo Irish Bank. Could the Minister report on his plans to privatise 25% of AIB at a significant loss to the taxpayer and could he give a commitment that there will be a vote in the Dáil before any such decision will be made on privatisation?

Michael Noonan (Limerick City, Fine Gael)
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The position of the Government in regard to the State's shareholdings in the banking sector is very clear. These were investments the State had to make during the banking crisis, and it is the Government's intention that the State will exit these investments in a measured and careful manner. I have been clear in stating that my primary objective in the disposal of these assets will be recovering the maximum amount of money for the Irish taxpayer.

Clearly, in order for us to proceed with the sale of any of our banking assets, we would need to be satisfied that the market is prepared to put a fair and reasonable value on the relevant business, bearing in mind its current performance, its future prospects and the outlook for the Irish economy. Officials in my Department continue to monitor market conditions and the performance of banking equities with a view to planning appropriate exit strategies, consistent with what is set out in A Programme for a Partnership Government.

In regard to the individual assets, I have indicated that an IPO is the optimal route to recouping value from our investment in AIB with the earliest possible IPO window being the second quarter of 2017. Indeed, officials in my Department, along with our independent financial adviser, 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 joint global co-ordinators to lead a selling syndicate in preparation for a possible IPO. The firms have been appointed for an 18 month period and additional firms will be appointed to fill out the syndicate at an appropriate future date. The appointment of the firms as advisers does not signal any intention or obligation for us to proceed with a transaction, which will be subject to a number of factors, including favourable market conditions. AIB is due to publish its 2016 financial results on Thursday, 2 March 2017 and we will assess the market reaction. Clearly, AIB remains our immediate priority given its size, however we continue to keep disposal strategies in relation to both Bank of Ireland and Permanent TSB under review.

Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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More than €20 billion of public money was put in and AIB is now valued at €11.3 billion. That is a fire sale by anyone's standards and it is a rip-off of the public in order to hand the banks back into private ownership and the disaster that was and will be. A particular result is that in advance of the privatisation, which is under way, and presumably it will continue after that, is a more aggressive approach to non-performing loans. I raised the issue with the Minister last week at the finance committee and he said not to worry because there are no owner-occupiers involved. Since then it has come out in the media that owner-occupiers are involved. However, my point is that I also have concern for people who are not owner-occupiers. Those who let, as tenants in buy-to-let properties, could find themselves under real threat of eviction from vulture funds. The media have identified Cerberus as a likely buyer of Project Cyprus, the book of buy-to-let properties, and it has a disgusting record of looking after people.

Michael Noonan (Limerick City, Fine Gael)
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The position of the Government in regard to the State's shareholdings in the banking sector is very clear. These were investments the State had to make during the banking crisis, and it is the Government's intention that the State will exit these investments in a measured and careful manner. I have been clear in stating that my primary objective in the disposal of these assets will be recovering the maximum amount of money for the Irish taxpayer.

Clearly, in order for us to proceed with the sale of any of our banking assets, we would need to be satisfied that the market is prepared. I have outlined much of the detail of the preparatory work we have already done. The next date of interest from my perspective is next Thursday when AIB's annual returns will be published. That will give the Deputy a reasonable insight into whether we could proceed or not and also into values. AIB has already returned significant amounts of money to the taxpayer and I am sure the Deputy is aware of that also.

Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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The consequences of the privatisation or part-privatisation of AIB are clear. There would be a loss of public funds that were invested and the money that goes back would just go straight off the debt. There would also be a loss of potential control of a bank, which instead of being an instrument for profit could be an instrument for the benefit of society. In addition, there would be a loss of service for customers. Half of the branches in the North, totalling 15, have been closed. Most important, some people could lose their homes in advance of the privatisation happening because of the likes of Cerberus getting involved. I understand the Minister's ideological commitment to private ownership of the banking system but, given those consequences, does he not agree that the Dáil should debate this matter? If the Government wants to propose the sale of AIB, the Dáil should have a right to decide on the matter by vote.

Michael Noonan (Limerick City, Fine Gael)
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First, the Deputy uses such terms as "give away" and "fire sale" very loosely. Like any asset, whether it is a bank, a house or a bicycle, it is only worth what a willing buyer is willing to give to a willing seller on any given day. When AIB was taken over by the State it was taken over because there were no willing purchasers. One would not have got €100 for it. It does not make sense to say AIB was worth €20 billion and now it is worth less. The point is that it was worth nothing when the State took it over.

Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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We took it over for €20 billion.

Michael Noonan (Limerick City, Fine Gael)
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No, we put a lot of money into it to recapitalise it. That was not the purchase price. That was the capital necessary to keep it going as a bank, and that is what it cost the State in terms of capital injection but it was not the market value.

Nobody was going to give €20 million for it. The problem was that nobody would give €20 for it at the time. Will we debate it? I will keep the Dáil informed. No decision has yet been made as to whether or not we are going for an IPO but I will keep Members informed every step of the way and we will see where the discussion leads.