Written answers

Tuesday, 24 May 2016

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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113. To ask the Minister for Finance further to his statement in Dáil Éireann during Private Members' Time on 17 May 2016 that Irish bank shares went down by 10% across the line on the date the Central Bank (Variable Rate Mortgages) Bill 2016 was published; the specific date he is referring to and the opening and closing share price for each bank on that date, and the evidence of any correlation between the two issues. [11592/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, markets react quickly to new information as and when it becomes available. In relation to the current issue, the key date was 9 May when there was wide media coverage including an article in the Irish Times which reported that the Deputy "hopes to publish a Bill within two weeks which will propose giving the Central Bank extra powers to help it to coerce banks to cut rates." The Deputy confirmed this in an interview on RTE on the same date.

Between open 9 May and close 17 May, the movement in the share prices of BOI and PTSB, and the impact on the State's stake in the two banks, are set out in the following table:

Open 9 May 2016Close 17 May 2016Movement - %
BOI

Share price per share

Market capitalisation

States stake
€0.239

€7,735m

€1,079m
€0.235

€7,605m

€1,061m
-2%
PTSB

Share price per share

Market capitalisation

States stake
€2.458

€1,118m

€838m
€1.920

€873m

€654m
-22%

Total value of States stake€1,917m€1,715m-10.5%
The source of the share price data included in the table is as per the Irish Stock Exchange.

The table does not include AIB as, although quoted on the ISE, its 0.1% freefloat means its trading price is not regarded as a reliable indicator of valuation. However, the AIB price fell from €8.2 to €6.823 in the same period - a drop of 17%.  Finally, it is worth highlighting that the industry standard index of European bank shares was flat over the same period - 142.12 start of trading on 9 May; 142.35 at close of trading on 17 May.

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