Written answers

Tuesday, 8 July 2014

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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183. To ask the Minister for Finance further to the recent engagement by Permanent TSB of Morgan Stanley to assist with the disposal of over €2 billion of par value loan portfolios, if he is aware of Morgan Stanley acting on behalf of any organisation considering a merger with PTSB; and if so, if he is concerned at any conflicts of interest; and if he will make a statement on the matter. [29469/14]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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184. To ask the Minister for Finance further to the recent engagement by Permanent TSB of Morgan Stanley to assist with the disposal of over €2 billion of par value loan portfolios, if he has any concerns about the performance of Morgan Stanley with the recent disposal of loan portfolios of National Australia Bank group and the British Co-op group. [29470/14]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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186. To ask the Minister for Finance further to the recent engagement by Permanent TSB of Morgan Stanley to assist with the disposal of over €2 billion of par value loan portfolios, his views on the suitability of that company in view of its involvement in various transactions involving shares and contracts for difference controlled by a person (details supplied) at the former Anglo Irish Bank in 2008; and if he will make a statement on the matter. [29472/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 183, 184 and 186 together.

As the Deputy will be aware there is a Relationship Framework in place with Permanent TSB ("PTSB"). Under the Relationship Framework PTSB is recognised as a separate economic unit with independent powers of decision. The Board and management team retains responsibility and authority for determining the bank's strategy and commercial policies and conducting its day-to-day operations. In accordance with Section 21 of the Relationship Framework I have been notified by PTSB that Morgan Stanley have been engaged to act on their behalf solely to facilitate the sale of the specified loan books only and not to advise on any other aspects of their strategy.

I have also been informed by PTSB that Morgan Stanley were chosen after a thorough competitive tender process taking into account their experience in similar transactions and their track record on previous transactions for PTSB. As the Deputy would expect I am acutely conscious of the potential for conflicts of interest when the State engages advisors to assist us in relation to our banking investments. Indeed the most recent invitation to tender relating to the appointment of financial consultants to the Department of Finance (and the accompanying draft Framework Agreement) contains extensive provisions relating to the declaration and management of conflicts of interests with which tenderers must comply. A copy of the invitation to tender may be accessed through the etenders website.

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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185. To ask the Minister for Finance in view of the €2 billion of par value loans currently being sold by the special liquidators of the Irish Bank Resolution Corporation, the €2.6 billion of par value mortgages and commercial real estate loans being sold by Permanent TSB and the sale by the National Asset Management Agency of various loans, his views that these disposals would benefit from centralised management; if sale costs could be reduced, and sale proceeds maximised from centralised management; and if he will make a statement on the matter. [29471/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The separate boards and management teams of IBRC (in Special Liquidation), Permanent TSB and the National Assets Management Agency retain the responsibility and the authority for determining the strategy and commercial decisions and conducting the day to day operations, including the sale of assets, and management of those legally separate institutions. In making such decisions the Board and management teams are highly conscious of ensuring that sale costs are minimised and that maximum proceeds are achieved in the sale of all loan portfolios. It would not be appropriate for me to interfere in the management decisions or the day to day operations of those institutions, none of which can be controlled by the State.

That said, the ongoing sales processes that are referred to are complex and specific to the various institutions. The portfolios concerned also involve considerably different asset types and classes in many cases. Centralised management of the various loan sales may be difficult given the complexities involved and the different strategic focuses of the institutions involved.

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