Michael McGrath (Cork South Central, Fianna Fail)
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80. To ask the Minister for Finance the change in the value of each of the Irish bank shares the State owns from the opening of markets on 24 June 2016, when the impact of the British referendum result took effect; and if he will make a statement on the matter. [19004/16]

Michael Noonan (Limerick City, Fine Gael)
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Over the four trading days from Friday morning the 24th June to close of business on Wednesday 29th June, the share price of Bank of Ireland fell by 30% and Permanent TSB over 26% as the market reflected the impact of the UK Referendum result on the UK, Irish and European economies. Over the same period, leading UK banks have fallen by a range of 23%-28% while the European bank sector has fallen by 17%. Clearly these moves suggest investors believe bank profitability in the coming years will be materially impacted. Indeed analysts have already moved to downgrade their earnings projections for UK and Irish banks and companies in many other sectors too.

Given our substantial financial interest in the banking sector, these developments are disappointing and we are closely monitoring events as they evolve. As I indicated in recent PQ responses, the current volatility in the stock markets are such that I expected that any market event involving our shares in the banks was more likely in 2017 than this year. As such the State had no plans to dispose of any of its bank shares in the coming months and no sale proceeds are included in the 2016 budget, so there is no immediate impact on our finances. In fact next month AIB is still scheduled to redeem its Contingent Capital Note of €1.6bn plus accrued interest. 

As part of their day-to-day role, officials in the Shareholding Management Unit will continue to monitor market conditions, review all strategic options relating to our banking investments and will consider from time to time whether the sale of shares would be beneficial for the State. Having said that I have no current plans to sell shares in any of the banks, notwithstanding the flexibility to do so within the Programme for Government.  

Note: AIB's share price has fallen by circa 13% over the same period though the very small free float involved means this is not a reliable indicator of the change in the bank's underlying value.