Pearse Doherty (Donegal South West, Sinn Fein)
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Question 119: To ask the Minister for Finance with respect to the €270,000 paid out in legal fees by EBS as part of its capital raising measures, if the EBS sought and received quotes from other firms before deciding to continue to use previous legal advisers for this work; and if he will make a statement on the matter. [19913/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 120: To ask the Minister for Finance the name of the firm used by EBS to provide advice in relation to its capital raising measures; and if he will make a statement on the matter. [19914/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 121: To ask the Minister for Finance if he is satisfied that best value for money was achieved in relation to the fees paid to advisers, including lawyers, investment advisers and underwriters, as part of capital raising measures; and if he will make a statement on the matter. [19915/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 119 to 121, inclusive, together.

The Deputy will be aware that the radical restructuring of the Irish banking system which I announced on March 31 and the very fundamental recapitalisation of the Irish banks involves many complicated capital markets and legal decisions. We have embarked on perhaps the most complicated systemwide banking restructuring ever and doing so in the rapid timeframe involved requires considerable expertise and resources. Making the right choices is critical to ensure best value for the State. Equally, the raising of capital when placing shares and the like invariably involves significant underwriting and other fees.

The engagement by banks of advisors is not only typical in this situation, it is also necessary to help make the best decisions and prevent making costly errors. We would expect banks to be conscious of obtaining best value and before engaging advisors, to make comparative choices as part of their procurement process. Recognising that the State is now a significant shareholder in the banks, my Department has however since March streamlined the use of advisors by eliminating considerable duplication and where appropriate utilising the services of the advisors already engaged by the banks which has permitted considerable saving to the taxpayers. There are however occasions where it is necessary for the State to have its own advisors where the interests of the state taxpayer and the banks might not be fully aligned.

The added value for the State in having these advisors has substantially outweighed the cost. The Deputy is reminded that €4.4 billion of burden sharing has already been secured. As I stated in a response to question number 18684 on 5 July from the Deputy, I have been informed by the National Treasury Management Agency (NTMA) that it expects to recoup the external advisory fees associated with the NTMA Banking Unit's involvement in the oversight of the capital raising exercise from AIB, Bank of Ireland, ILP and EBS. The Deputy will also be aware that, in relation to Bank of Ireland, the State is receiving fees totalling circa €100 million in relation to the capital raise (underwriting fees, contingent capital instrument fees, VAT etc.).

Turning to the questions relating to the EBS, the Deputy will be aware that the EBS is an independent economic entity which operates at arm's length from the Government. Nonetheless, as I said previously, we would expect it to be conscious of obtaining best value and before engaging advisors to make comparative choices as part of their procurement process. EBS selected BNP Paribas as dealer manager for the execution of the Tier 2 transaction. Having previously executed a buyback transaction for INBS, BNP Paribas had valuable knowledge of the Irish subordinated debt market. When conducting an offering of this sort, an institution is required to hire a dealer manager with sufficient market expertise and knowledge in order to aid in structuring, pricing and execution of the transaction. No financial advisor was used on the Tier 1 transaction as this did not involve the same level of financial structuring and execution.

EBS used Arthur Cox to advise on Irish legal aspects of the transactions. EBS did not seek quotes from other firms as Arthur Cox had acted for EBS in the previous buyback transaction which was only completed in February 2011. In particular, the Tier 1 redemption was complex and it was considered most efficient in terms of time, cost and potential litigation risk to use lawyers that understood the detail of the original deal. It was likewise considered most economic to use the same legal firm for the Tier 2 transaction to avoid duplication of time and cost. I should add that lawyers from the UK and Luxembourg also provided advice given the nature of the transaction and were appointed on a similar basis.