Written answers

Thursday, 26 April 2012

Department of Finance

Bank Guarantee Scheme

8:00 pm

Photo of Joanna TuffyJoanna Tuffy (Dublin Mid West, Labour)
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Question 65: To ask the Minister for Finance the money that has been received back into the Exchequer and or any State agency from the banks in respect of the bank guarantee, and any capitalisation to date and the levies and or undertakings that have been given by the banks to the State or any State agency in that regard for the future; and if he will make a statement on the matter. [21102/12]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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The bank guarantee (schemes) to which the Deputy refers are the Credit Institutions Financial Support Scheme 2008 (CIFS Scheme) which was in operation between 30 September, 2008 and 29 September, 2010, and the Eligible Liabilities Guarantee Scheme (ELG Scheme) which came into operation on 9 December, 2009 and has a current issuance end-date of 30 June, 2012, subject to review by the EU Commission. The total fees received to date from the covered banks in respect of both the CIFS and ELG Schemes amount in total to €3.107bn which does not include interest accrued. This amount comprises €758.4m in respect of the CIFS and €2,348.5m in respect of the ELG Scheme.

A breakdown of fees paid by year for each of the covered banks can be seen in the tables below.

ELG fees paid to date by Participating Institutions

€millionsIL&PBoIAIBIBRCEBSTotal
201095.9275.5299.3149.934.2854.8
2011172.9448.7464.881.462.61230.4
201237.9107.995.89.911.8263.3
Total306.7832.1859.9241.2108.62348.5

CIFS fees paid to date by Covered Institutions

€millionsIL&PBoIAIBAngloEBSINBSPostbankTotal
2008-32.3-37.9--0.00470.20
200935.4138.1174.794.89.723.80.020476.52
201014.868.358.354.95.98.80.015211.01
2011---0.7---.70
Total50.2238.7233.0188.315.632.60.039758.43

The bank recapitalisation commitments made by the State to date are set out in the following table:

€bnAIB/EBSBoIIL&PIBRC (Anglo/INBS)Total
Government preference Shares (2009) - NPRF3.53.5*--7.0
Capital contributions (with Promissory Notes as consideration) /Special Investment Shares (2010) – Exchequer **0.9--30.731.6
Ordinary Share Capital (2009) – Exchequer---4.04.0
Ordinary Share Capital (2010) - NPRF3.7---3.7
Total pre-PCAR 2011 (A)8.13.5034.746.3
PCAR 2011:AIB/EBSBoIIL&PAnglo/INBSTotal
Capital from Exchequer***3.9-2.7-6.5
NPRF Capital8.81.2--10.0
Total PCAR (B)12.71.22.7-16.5
Total Cost of Recap for State (A) + (B)20.74.72.734.762.8
* €1.7bn of BoI's government preference shares were converted to equity in May/June 2010 (€1.8bn still left in existence). The government also received €0.5bn from the warrants relating to BoI's preference shares (excluded from table above).
** The IBRC amount is made up of a total capital contribution for Anglo / INBS of €30.6bn and a special investment share of €0.1bn (INBS). The Anglo / INBS capital contribution impacted in full on the GGB in 2010. The consideration for the Anglo / INBS capital contribution was €30.6bn of promissory notes. These Promissory Notes are an amount due from the State to IBRC. Each year, on 31 March, €3.06bn is paid by the Exchequer to Anglo / INBS as part of the scheduled repayments of the promissory notes. The first such repayment was made on 31 March 2010.
*** The Exchequer cost of the 2011 BoI recap is shown net of share sale to private investors (Completed in October, 2011)

As the Deputy will be aware, the banks were required to raise a total of €24bn as a result of the Central Bank's 2011 Prudential Capital Assessment Review (PCAR). However, primarily as a result of successful private equity contributions, asset sales and burden sharing with bondholders the Government only had to inject €16.5bn into the relevant institutions. The State has also received cash dividend payments from the Bank of Ireland Government preference shares in the amount of €0.4bn to date.

In addition, the State is committed to acquiring Irish Life for €1.3bn to complete the recapitalisation of Irish Life & Permanent. It is expected that the proceeds of an onward sale of Irish Life in due course will reduce the amount the State has committed to the bank recapitalisation.

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