Leo Varadkar (Dublin West, Fine Gael)
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Question 161: To ask the Minister for Finance the amount of money, to date in 2009, he has invested in the banks; the amount per bank; and the amount of this money that has come from borrowing from the National Pension Reserve Fund; and if he will make a statement on the matter. [25206/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government announced on 11 February 2009 that the recapitalisation of Allied Irish Bank and Bank of Ireland through the purchase of preference shares to the value of €3.5 billion in each bank would be funded through the National Pensions Reserve Fund (NPRF), with €4 billion coming from the Fund's resources and €3 billion to be provided by front-loading the Exchequer contributions for 2009 and 2010. Following the enactment of the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009, the recapitalisation of Bank of Ireland was effected on 31 March 2009 and the recapitalisation of Allied Irish Bank on 13 May 2009 through the purchase of the preference shares by the National Pensions Reserve Fund.

The preference shares held by the NPRF pay a fixed dividend of 8% payable in cash or ordinary shares in lieu. These shares can be repurchased at par up to the fifth anniversary of issue and at 125% of face value thereafter. Warrants attached to the preference shares give an option to purchase up to 25% of the existing ordinary shares of each bank calculated on a post-dilution basis. The warrants can be exercised from the fifth to the tenth anniversary of the purchase of the preference shares.

I expect that this participation by the NPRF in the recapitalisation of Allied Irish Bank and Bank of Ireland will yield a satisfactory return for the Fund over time and will assist the Fund in its purpose of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions from 2025.

As the Deputy will be aware, the Government has also decided to provide €4 billion in capital to Anglo Irish Bank. We are currently in the process of obtaining EU approval in this regard.