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

116. To ask the Minister for Finance if the approval of the ECB is required for a bank (details supplied) to resume dividend payments to shareholders; if any discussions are under way in this matter; his role as Minister and the role of his Department in relation to possible dividend payments by the bank; and if he will make a decision on the matter. [7793/17]

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

As the Deputy will be aware, the Single Supervisory Mechanism (SSM) is now responsible for the prudential supervision framework for Euro area banks. Each Irish bank has a Joint Supervisory Team made up of representatives of both the Central Bank of Ireland and the SSM. I cannot comment on regulatory discussions between banks and the SSM but if any institution was proposing to restart dividends to shareholders after a number of years, it would be reasonable to assume that the board would only recommend such a course of action with the concurrence of their regulator.

Under the CIFS/ELG Guarantee Scheme, no new dividends can be paid until such time as the Minister for Finance, in consultation with the Central Bank, otherwise determine. This requirement was in put in place at the beginning of the financial crisis to preserve capital in the banks and before the State took shareholdings in the various institutions.  Given the recovery of the banking sector, our substantial investments in these firms and a transformed regulatory environment, the restoration of prudent dividends over the coming years would ultimately be in the interests of all shareholders including the State.

Finally in the case of AIB and Permanent TSB the declaration and payment of dividends is also defined as a consultation matter as part of their respective Relationship Frameworks. These can be accessed at the following links:

AIB:

Permanent TSB: .