Pearse Doherty (Donegal, Sinn Fein)
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222. To ask the Minister for Finance the estimated impact on Ireland's debt ratio of the 25% and 100% sale, respectively, of a bank's (details supplied) shares at current market value; and if he will make a statement on the matter. [19180/17]

Michael Noonan (Limerick City, Fine Gael)
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It is not possible to ascribe a current market value to the States shareholding in AIB at this juncture as AIB's share price is not a reliable indicator of the bank's underlying value given the very small free float available in the market.

That said, at the end of 2016, the ISIF valued the State’s 99.9% shareholding in AIB at €11.3bn, as part of their Q4 update. It should be noted that this is not reflective of any valuation that might be achieved by the State as part of an IPO as it is an indicative ‘outside-in’ valuation based on the estimated financial position of the bank at year end 2016 and publicly available information.

The most recent official forecast of general government debt (GGD) for 2017, published in the Stability Programme Update in April 2017, was €204.6 billion, which equated to 72.9% of GDP. The impact of a 100% sale at the ISIF valuation would reduce the debt to GDP ratio by 4.0 percentage points to 68.9%. The impact of a 25% sale at the ISIF valuation would reduce the debt to GDP ratio by 1.0 percentage points to 71.9%.

As I have previously indicated, it is my view that because public indebtedness rose partly due to the recapitalisation of the banks, it is appropriate to use one-off revenue from divesting the State of its banking assets to reduce debt. A lower level of debt is not only beneficial in terms of the fiscal sustainability of the State but would also result in reduced interest payments in future years.