Written answers

Tuesday, 6 July 2010

Department of Finance

Banking Sector Regulation

10:00 am

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 128: To ask the Minister for Finance when he expects the EU Commission to issue its decision on the restructuring plans of banks (details supplied); and if he will make a statement on the matter. [29319/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, the following institutions were required under state aid rules to submit restructuring plans following receipt of state aid and the plans were submitted on the following dates:

Bank of Ireland Plan - 30 September 2009,

Allied Irish Banks Plan - 13 November 2009

Anglo Irish Bank Plan - 30 November 2009

EBS plan - 31 May 2010

INBS plan - 22 June.

Considerable discussion, dialogue and exchange of information is continuing in respect of the restructuring plans that have already been submitted as the Commission undertake their assessment of the plans in line with the applicable state aid rules. Negotiations in respect of the Bank of Ireland plan are at an advanced stage, and a decision is expected from the European Commission by mid-2010. AIB has adjusted the content of its plan to reflect the new capital requirements announced by the Financial Regulator in March, while Anglo Irish Bank, on foot of a request by the Commission, submitted a revised plan on 31 May 2010. It is too early to assess when final approval of the restructuring plans for these institutions will be granted by the Commission.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 129: To ask the Minister for Finance if it is envisaged that the dividend rate of the preference shares held by the National Pension Reserve Fund in Allied Irish Banks will be revised upwards, as happened recently with its preference share holding in Bank of Ireland; and if he will make a statement on the matter. [29320/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The Financial 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. Accordingly, I am not in a position at this stage to say how the dividend rate on the State's preference share investment in the bank will be affected.

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