Written answers

Tuesday, 2 May 2017

Department of Finance

Banking Sector Data

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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233. To ask the Minister for Finance if, in view of the potential sale on part of the State investment in a bank (details supplied), his Department has made an assessment on possible future dividends from the bank over any time period; and if so, the results of such an assessment. [19364/17]

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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238. To ask the Minister for Finance if his Department has made an assessment on possible future dividends from a bank (details supplied) over any time period in view of the potential sale on part of the State investment in the bank; and if so, if he will provide the results such assessment to Dáil Éireann. [19381/17]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 233 and 238 together.

As the Deputy will be aware, the payment of any dividend is exclusively a matter for the board and management of AIB based on the bank’s financial performance and future prospects, and subject to regulatory approval.

AIB announced a proposed dividend payment of €250m to ordinary shareholders as part of their annual results for 2016, 99.9% of which will accrue to the State as the Bank’s majority shareholder. This payment is particularly significant given that it has been nine years since the bank last paid a dividend to shareholders.

While the factors influencing such dividend payments are outside my control, I would consider it normal for a profitable bank in a normal business environment to pay a prudent, regular dividend to Ordinary Shareholders where there is no impediment to do so, in keeping with a commercial strategy and financial performance objectives espoused by the bank’s management.

In determining that an IPO was the best route to maximise value for the State the Department and its advisors ran a number of income and capital return scenarios over the period since 2014. To date however we have not formally incorporated any forecast dividend payment schedule in our budgetary projections. Given the State is considering a disposal of some of its shares over the coming period, it would not be advisable for me to put any forecasts into the public domain.

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