Robert Dowds (Dublin Mid West, Labour)
Link to this: Individually | In context | Oireachtas source

226. To ask the Minister for Finance if he will provide an update on recent financial interactions that he has had with Bank of Ireland. [3006/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware the Department has put in place Relationship Framework agreements for each financial institution in which the State has a shareholding. The framework documents define the relationship between the Minister and the relevant institutions. These documents are structured to ensure that the institutions operate on a commercial basis and independent of the Minister in respect of their day to day operations. As a result of the State’s recapitalisation of Bank of Ireland, the State has a number of different investment interests in the Bank including equity, Preference Shares and the investment in the Contingent Capital Notes (CCNs).

These give rise to a number of financial interactions between the Government and the Bank of Ireland. For instance, in July of 2012, the Government received the coupon interest on the CCNs of €100m. In February 2012, the Government received a dividend of €188m in cash, on its preference shares and this year’s dividend is expected, again in cash, next month.

Under the terms of the Eligible Liabilities Guarantee (ELG) scheme, the Bank remits ELG fees on a quarterly basis to the Department. The ELG fees received by the Department from Bank of Ireland in 2012 were €375.4m. In addition Bank of Ireland is invoiced periodically in respect of administration and legal costs associated with implementation of the ELG scheme, the fees for which were €92,087 for the period November 2011-October 2012.

Two weeks ago, the Government was pleased to announce the sale of the Contingent Capital Notes (CCNs) at a profit to the Government of €10m. The transaction settled on Tuesday the 15th of January and the State was paid proceeds of just over €1,056 million, comprising the nominal principal amount of €1,000 million, interest accrued of over €46 million covering the period 29th July 2012 to the disposal date, and the profit of €10 million.

The Deputy should also be aware that officials from my Department meet with representatives of Bank of Ireland on a regular basis – including a monthly management meeting. This is the main forum for the Bank and Department to discuss matters of financial interest.