Michael McGrath (Cork South Central, Fianna Fail)
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25. To ask the Minister for Finance his plans for the remaining share of a bank (details supplied); his further plans in relation to the remaining share of all other State-supported financial institutions held by the Government; and if he will make a statement on the matter. [31245/17]

Michael McGrath (Cork South Central, Fianna Fail)
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Following the recent AIB IPO, will the Minister clarify the Government's intentions in respect of the remaining shareholding the State holds in AIB and also its shareholdings in the other banks, namely, Bank of Ireland which is 14% State-owned and Permanent TSB which is 75% State-owned.

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the State has now sold 25% of AIB's ordinary share capital at a price of €4.40 per share for a consideration of almost €3 billion. The offering was strongly supported by a broad range of international institutional investors, with all of the top investors being categorised as longer term investors and sovereign wealth funds. The State also granted an additional over-allotment option to its appointed stabilisation agent Deutsche Bank, covering a further 3.75% of AIB's ordinary share capital as part of the transaction. Hence, unless some of the shares are bought back in the market in the period post-floatation, the State will recoup a further €400 million, bringing the total proceeds from the IPO to €3.4 billion.

Following the AIB IPO, the State's remaining shareholding in the bank is in a lock-up period of 180 days. This is standard market practice. I, therefore, expect no further sale of AIB shares in 2017. After this period elapses, officials in my Department will revert to monitoring the performance of the bank, its share price and equity markets more generally to determine the next sensible opportunity to realise and gain value from our investment. It is important to point out that exiting our full investment in AIB in a measured way that will maximise the gain will take a number of years, but I believe that in time we will recoup all of the money we invested in the bank. Under A Programme for a Partnership Government, any future sale of AIB shares contemplated before the end of 2018 would need to be approved by the Government.

Similarly, my officials and I continue to monitor the performance of Permanent TSB and Bank of Ireland and plan for exit opportunities that may arise in the future. However, having just completed a large equity capital markets transaction with the shares in AIB, I have no immediate plans to sell any of the State's shares in either of these banks at this time.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his reply. I note the AIB shares are trading at €5.09 and that investors are doing well so far, but, of course, it is early days. I understand the proceeds of the sale will be received by the Ireland Strategy Investment Fund and that, under the National Treasury Management Agency (Amendment) Act 2014, the Minister has the power to instruct the fund to make payments to the Exchequer. Will he confirm if it is the intention of the Government to issue such an instruction to the ISIF to transfer funds to the Exchequer and clarify that it is his intention to use them to reduce the Exchequer's borrowing requirement? Will the Minister also provide clarification on the use of future proceeds? He laid out the Government's position on the proceeds of the sale of the stake in AIB, but has the Government raised any issue with the European authorities, namely, the European Commission, about the future use of proceeds of the sale of other bank-related assets?

Paschal Donohoe (Dublin Central, Fine Gael)
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On the Deputy's first point about the share price and investors doing well, of course, the State is still an investor. It owns the vast majority of the bank and as the share price goes up, our stake in the bank also goes up.

To answer the Deputy's second question, it continues to be my intention to use the money to repay the national debt.

The €3 billion relating to the 25% of sales was released back to the Exchequer last Tuesday or Wednesday. We will be using it to pay down the national debt in a way that meets our requirements under EU law.

The future sale of bank shares is not on my immediate agenda as I outlined in my first reply to Deputy McGrath. I have not, as of yet, raised it with the European Commission or elsewhere. However, I expect there will be ongoing debate throughout the next one or two years in respect of the future role of fiscal rules within the eurozone.

Michael McGrath (Cork South Central, Fianna Fail)
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Our view as a party is that there is no rush in disposing of further shares in AIB or in respect of Bank of Ireland or Permanent TSB either. The fact is that AIB is now resuming dividend payments. It is our view that, in the absence of any negotiations with the European Commission to secure greater flexibility for the State on how any future proceeds might be used, the State should not proceed with any further sale of shares. I am simply setting out our position.

We believe there is need for greater flexibility on the use of such one-off proceeds, especially in the area of investment. There is significant consensus across the House in favour of using proceeds in the future for that purpose. That is our position.

I take it from what the Minister has said that he is going to issue the instruction to the NTMA strategic investment fund under the Act to transfer the €3 billion or so into the Exchequer balance.

Joan Burton (Dublin West, Labour)
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It is true to say that the Exchequer returns of yesterday were heavily flattered by the AIB receipt and the €3 billion referred to. There is essentially a political problem in the sense that expectations are building up with such flattering net figures. People want to see schools being built and hospitals being built and refurbished. Many old machines in hospitals have now run their life's course having been bought before the beginning of the collapse.

We cannot blame people for having these expectations. However, we should be careful what we say to people. The Minister may form his own view in due course but his predecessor in particular held firmly to the view that the release of extra capital investment would overheat the economy. Given our growing population and poor infrastructure, we desperately need additional investment in various areas, especially in areas of public transport and carbon saving. Has the Minister reconsidered, or has he had a chance to reconsider, the position in that regard?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yesterday, my Department was clear and careful not to use the proceeds of the sale in the AIB share to influence the half-year figures for income and expenditure. The changes in our position overall were mostly driven by the improvement in tax collection, especially throughout June. We did not use the sale of the AIB share to influence the presentation of those figures, but of course it did have a big effect on the surplus that we delivered at this point in the year versus the deficit of last year.

I have not said, nor do I believe my predecessor said, that the release of extra capital in any circumstances would overheat the economy. I recall in the debate in the House some weeks ago when, as Minister for Public Expenditure and Reform, I said that additional capital investment was needed. I hope to make progress on that but we need to be careful that we do not release such quantities of money that we find ourselves in a position where we are back to where we were some years ago with construction and the pricing of property going up and up. The only people who suffer from that in the end are citizens and taxpayers.

Declan Breathnach (Louth, Fianna Fail)
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Six minutes are left approximately. We have received apologies from Deputy Bernard Durkan and Deputy Dara Calleary.