Michael Noonan (Limerick East, Fine Gael)
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Question 119: To ask the Minister for Finance the progress being made to recapitalise AIB, Bank of Ireland and the EBS to a level of 12% Core Tier 1; and if he will make a statement on the matter. [1303/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Central Bank has set out the further capital that will be required by AIB, BOI and EBS in order for them to meet a 12% core tier 1 ratio by the end of February 2011 as agreed in the Programme for Financial Support with the IMF, EU and the ECB.

In order to meet this target AIB in December 2010 received a net capital injection of EUR3.7bn from the National Pension Reserve Fund. It will require a further €6.1 billion which the State remains committed to meeting to the extent that it cannot be met through capital raising measures by the bank itself.

The Central Bank has instructed Bank of Ireland to raise a further €2.2 billion to reach a 12% core tier 1 ratio by the end of February 2011. To date Bank of Ireland has raised some €700 million of this capital requirement through an LME exercise and intends to seek to generate the remaining required capital through a combination of internal capital management initiatives, support from existing shareholders and other capital markets sources. On 10 January 2011 Bank of Ireland announced the completion of the sale of Bank of Ireland Asset Management to State Street Global Advisors.

In December 2010 €525 million of capital was injected into EBS building society in return for the issuance of special investment shares. The Central Bank has instructed that EBS must raise an additional €438 million to meet the revised target. The State remains committed to meeting the remaining capital requirement, to the extent that private capital is not forthcoming. In relation to the sales process two bids for EBS are now being considered; one from Irish Life & Permanent and the other from an international consortium led by Cardinal Capital Group. The process of final negotiations with these parties is continuing and it would not be proper for me to comment further on the detail at this stage.