Ruairi Quinn (Dublin South East, Labour)
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Question 58: To ask the Minister for Finance if he will provide an update regarding the progress made with the recapitalisation of Allied Irish Banks, its disposal of assets, suggestions that the recapitalisation timescale could be altered; and if he will make a statement on the matter. [34037/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In my statement on banking this morning, I have provided a comprehensive report on the capital needs of AIB and have outlined how these capital needs will be met.

To date, AIB has announced the sale of its Polish subsidiary BZWBK which is expected to generate capital of €2.5bn, leaving a further €4.9bn to meet the capital target of €7.4bn set by the Financial Regulator on 30 March 2010.

As I announced earlier today, the Financial Regulator has assessed that AIB will require a further €3bn in capital to allow for higher discounts on remaining NAMA transfers, this added to the outstanding €4.9bn to be raised to meet the existing Financial Regulators PCAR requirement will bring AIB's total capital requirement to €7.9bn.

Of this €5.4bn is to be raised through a placing and open offer to shareholders underwritten by the NPRFC. If necessary, the NPRFC's underwriting commitment will be met by the conversion of up to €1.7bn of the State's existing preference shareholding and the investment of the NPRFC's cash balance.

In the event that the bank's residual capital requirement is not met through asset disposals, it may be met from a subsequent conversion of the remaining €1.8bn. preference shares to the extent that this may prove necessary.