Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

25. To ask the Minister for Finance the current timeline he envisages for disposal of the State’s holding in banks (details supplied); the market conditions he believes would need to be in place, before proceeding with an initial public offering, IPO, and if he expects there to be a retail element to any IPO; and if he will make a statement on the matter. [17527/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the deputy is aware, the State has a shareholding of 99.9% in AIB and of 14% in Bank of Ireland. These are valuable assets to the State and it is this Government's intention that the State would exit these investments in a measured and careful manner. As I have indicated on a number of occasions, my primary objective in the disposal of these assets will be recovering the maximum amount of money for the Irish taxpayer.

With regard to AIB in particular, I have indicated in the past that an IPO is likely to be the optimal route to recouping value from our investment. At the beginning of this year officials in my Department appointed an Independent Financial Adviser, following a tender process, to assist with analysis and planning related to our shareholding in AIB, and much of this initial preparation has now been completed. However, given the complex nature of an IPO process, the need to access certain IPO 'windows' and the recent volatility seen in stock markets, I would now deem it more likely that a market event involving AIB would occur in 2017, rather than 2016. Clearly in order for us to proceed with an IPO, we would need to be satisfied that the market is prepared to put a fair and reasonable value on the business bearing in mind its current performance and future prospects.

With regard to the Deputy's question on any retail element to an IPO, this option will be assessed along with many other considerations when deciding on how an IPO would be structured. No decision has been made in this regard.

BOI had a strong return to profitability in 2014 and built on this further in 2015. The bank has made significant progress in reducing NPLs and growing new business. Officials in my Department monitor market conditions and the performance of banking equities on an ongoing basis. When I deem conditions conducive to recovering value for the Irish taxpayer, I will direct the ISIF to exit our shareholding in a manner that best achieves this objective. As is the case with AIB, market conditions at this point are not supportive of any disposal.