Brian Lenihan Jnr (Dublin West, Fianna Fail)
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On 30 March 2010 I gave details to the House of the further capital needs of the banks in order to meet the Financial Regulator's requirement of a Tier 1 capital ratio of 8%, of which 7% must be equity. In the case of AIB I said the Regulator has determined that AIB must raise additional equity capital of at least €7.4 billion by the end of the year to meet the new base case capital standards. As the first step in meeting its capital needs AIB has commenced the process of sale of overseas assets. The disposal proceeds will provide significant capital but will not be sufficient to address the full requirement. To the extent that the gap is not filled by the private sector the State is willing to convert some or all of its preference shares as required on terms to be agreed that will provide full value for the State. Depending on the structure of the capital raising and the extent of private participation, no new Exchequer funding may be required. But if additional money is required, it will be provided by way of ordinary equity. Any additional capital requirement will be met from the National Pensions Reserve Fund. As I have stated previously, if sufficient private capital is not available it is possible that the State will have a majority shareholding in AIB as a listed entity.