Written answers

Tuesday, 16 April 2013

Department of Finance

State Banking Sector

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance if he will confirm the stake held in Bank of Ireland by the American group of investors (details supplied); the consideration paid for that stake; the stake held by the State in Bank of Ireland; and the consideration paid for that stake. [16283/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The actual amount sold by the NPRF to the American group of investors was 10.5 billion Bank of Ireland (BOI) shares at a price of 10c per share. The disposal of these shares took place in two tranches. The first disposal for €0.24 billion settled on 2 August 2011 with the second, and final, tranche for €0.81 billion settling on 17 October 2011. This stake represents a shareholding of approx. 35% of the equity in BOI. As a consequence of this disposal, the State’s gross investment in BOI peaked at €4.7bn which was €1.0bn lower than it otherwise would have been. From a net investment point of view, the State received circa €0.5bn for its warrants in 2010 which were originally attached to our preference shares, and in January 2013 the State also successfully disposed of the €1.0 billion Contingent Capital instruments in Bank of Ireland for a profit of €10m. These two “capital” transactions reduced our net investment position to circa. €3.2bn which now takes the form of our remaining 15% equity stake and preference shares with a nominal value of €1.8bn.

However the State has also received significant income from the bank in the form of coupons and dividends on its investments as well as ELG fees. Taking all these into account to calculate what could be called a net cash position with the bank, the figure is nearer €1.1bn and I am confident that Bank of Ireland will ultimately repay this remaining amount to the taxpayer.

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