Michael McGrath (Cork South Central, Fianna Fail)
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124. To ask the Minister for Finance his views on the manner in which the acquisition of Newbridge Credit Union by PermanentTSB has proceeded; if he expects an additional liability to the State to arise in respect of Newbridge Credit Union; and if he will make a statement on the matter. [32473/14]

Michael Noonan (Limerick City, Fine Gael)
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Pursuant to a High Court order dated 10 November 2013 all assets and liabilities of Newbridge Credit Union Limited - excluding the premises - were transferred to Permanent TSB. At transfer, all savings accounts held in Newbridge Credit Union Limited became deposit accounts with Permanent TSB under section 49(5)(b) of the Central Bank and Credit Institutions (Resolution) Act 2011.  

The legal entity Newbridge Credit Union Limited was placed in liquidation following an order of the High Court granted on 16 December 2013. The Newbridge Credit Union building remains in the ownership of the legal entity Newbridge Credit Union Limited.  The liquidation process is ongoing. 

The Resolution Fund is the principal creditor of Newbridge Credit Union Limited. Any proceeds realised from the sale of the building - net of disposal costs - will be remitted to the Resolution Fund in accordance with the Central Bank and Credit Institutions (Resolution) Act 2011.

I agreed to the Governor of the Central Bank's request for the payment of a financial incentives agreement between the Central Bank and PTSB dated 10 November 2013. The agreement contains provision for payments to PTSB of up to €53.9m under a number of headings. The financial incentives agreement is available on the Central Bank's website.  

The headings include the following:

-€23m in cash up front to address the capital shortfall in the balance sheet;-

€4.25m for restructuring and integration costs;

-€2m for other transferring liabilities; and -

A risk share on the transferring loans whereby the State will absorb 50% of the losses where loans perform below their transfer value and 50% of the gains where they perform above the transfer value. If these loans were written off entirely with no recovery this would result in an additional €24.7m total cost.

To date, the Fund has paid €23 million to PTSB as a cash financial incentive on 10 November 2013, and €0.3 million as a Transferring Liability payment.