Joan Burton (Dublin West, Labour)
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91. To ask the Minister for Finance if he expects that the State will still move to sell off all or part of a bank (details supplied); the estimated timeframe for this; the expected yield to the Exchequer; if this yield will be ring fenced for a particular purpose; and if he will make a statement on the matter. [34101/16]

Michael Noonan (Limerick City, Fine Gael)
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The State has a shareholding of 99.9% in AIB. This shareholding is a valuable asset to the State and it is the Government's intention that the State will exit this and our other banking investments in a measured and careful manner. My primary objective in the disposal of those assets will be recovering the maximum amount of money for the Irish taxpayer.

I have indicated in the past that an IPO is likely to be the optimal route to recouping value from our investment in AIB. At the beginning of this year officials in my Department appointed an independent financial adviser, following a tender process, to assist with analysis and exit planning and much of the initial preparation has now been completed. The bank's CEO also indicated recently that much of the internal preparation that would be required in advance of launching an IPO process has also been completed. In addition, I welcome the bank's continued strong performance, demonstrating sustainable profitability and strong capital generation over a number of consecutive reporting periods. 

Nonetheless, given the complex nature of an IPO process, the need to access certain IPO "windows" and the recent volatility seen in stock markets, we are now looking at 2017 for any disposal rather than this year. Fortunately given the strong state of the economy, progress made in reducing our national debt and positive market sentiment towards Ireland, we are not under any pressure to sell our shares and hence we can choose when to time any disposal. 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. As you will appreciate a lot of preparatory work is involved in such a process and officials in my Department continue to plan such that when conditions do improve the State is ready to execute.

It would not be possible or prudent for me to estimate the amount which might be received from any future sale of shares in AIB. As the Deputy may be aware, the shares in AIB that are currently freely held amount to only a tiny proportion of the bank's total shares. It is therefore an illiquid share with a distorted valuation, and so cannot be considered a valid indicator of how the market would value AIB in an IPO.  

As I have previously indicated, all capital returned from the State's investments in the Irish banks will be used to reduce the national debt. That is the prudent course of action as it reduces our ongoing borrowing costs and ensures the future strength and stability of the economy.