Tommy Broughan (Dublin North East, Independent)
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21. To ask the Minister for Finance in view of the results of the bank stress tests, his position on the State’s continuing ownership of AIB and EBS. [41720/14]

Michael Noonan (Limerick City, Fine Gael)
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The positive results for AIB are an important milestone and validation that the bank is well capitalised. These results will allow my officials to move to the next phase of crafting our plans to return some of the large investments made between 2009 and 2011 to the taxpayer. It is critical that we carefully examine all possibilities open to us to ensure that this investment is protected and enhanced with a view to ultimately generating an optimal return for the State.

The return to profitability by AIB in the first half of 2014 is good news from the perspective of the Irish taxpayer, as it enhances the value of the bank for the taxpayer. The latest valuation of the AIB shares was carried out by the NPRFC at the end of 2013, and this valued the State's ordinary and preference shareholding at €10 billion. Including the Contingent Capital (COCO), this brings the value of the State's shareholding to €11.6 billion. Since the last valuation of the State's holding, bank stocks in many Eurozone countries have performed well, AIB has posted a profit in mid-2014 and I would therefore be confident that the current value of AIB is greater than the NPRF valuation at 31 December 2013.

Officials from the Shareholding Management Unit in my Department engage regularly with AIB on a range of issues including the financial performance of the bank, strategic objectives and its capital structure. Following the successful completion of the Comprehensive Assessment my Officials will explore options around returning capital to the State.

With respect to the State's holdings in the banks, Government policy remains unchanged and we do not wish to hold these investments in the banks over the long term.  Subject to market conditions therefore we are willing to exit in a manner that maximises value for the taxpayer.

In the last 18 months the State has exited successfully from some debt investments with the sale of the Bank of Ireland Contingent Capital Notes and Preference Shares in addition to the sale of Irish Life. Holding our equity investments longer enables the State to benefit from the economic recovery and given the significant cash resources we hold, we are not under pressure to exit our remaining investments.