Pearse Doherty (Donegal, Sinn Fein)
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226. To ask the Minister for Finance if he will consider the establishment of a future of Irish banking forum that would include all key stakeholders, banks, regulators, unions and external experts to consider the current state of the Irish banking market and its long-term future in view of the announced withdrawal by a bank (details supplied) from the market; and if he will make a statement on the matter. [10534/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware the Financial Services Union (FSU) has suggested the establishment of a Banking Forum to consider the future of banking.

When I met with the FSU, last December, I outlined that I did not think my Department should participate in the Forum as I was concerned that it would not represent a model of good governance to have competent authorities, such as the Department of Finance and the Central Bank of Ireland, participating in the formulation of proposals and recommendations that will then be submitted to Government for objective consideration by the same competent authorities.

However, the Programme for Government highlights the importance of social dialogue and the importance of open engagement with all sectors of society. Accordingly, I and my Department are happy to engage with the FSU and other stakeholders. In that context, I engaged with the FSU late last year on the strategic review of Ulster Bank. I also met with the FSU on Friday morning after the announcement by NatWest and I have committed to further engagement with the FSU in relation to this issue.

Pearse Doherty (Donegal, Sinn Fein)
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227. To ask the Minister for Finance the engagement he has had with banks (details supplied), given the State shareholdings in those banks with a view to securing elements of loan books of another bank in advance of its withdrawal from the market. [10535/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I have been briefed on certain discussions and am supportive of trying to bring about an outcome that is good for both AIB and PTSB, the banks referenced in the recent Nat West announcement, but more importantly for Ulster Bank’s customers, staff and the Irish economy generally.

The loss of Ulster Bank after so many years is deeply disappointing and will have difficult consequences for some, if not many people. The Government's focus will be on trying to ensure that the disruption associated with the bank's departure is as limited as possible and finding ways to strengthen the banking landscape in the months and years ahead. What I am absolutely certain of is that the Government should not do anything that makes the problem we face worse and that would include any suggestion that I try to direct banks to do certain things, even though I have no such power, or pass legislation that would further restrict their freedom of operation.

Pearse Doherty (Donegal, Sinn Fein)
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228. To ask the Minister for Finance if he has considered the establishment of a third force within the banking market to compete with banks (details supplied); his views on the ability of another bank to play that role; and the consequences that may have for the Exchequer. [10536/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the NatWest Group announced its 2020 Full Year results on Friday, 19th February. As widely expected, NatWest confirmed that it intends withdrawing from the banking sector in the Republic of Ireland and has begun the process of winding down its ROI Ulster Bank business.

As part of this process, NatWest confirmed that it is in negotiations with AIB in relation to the sale of a portfolio of performing commercial loans estimated to be worth approximately €4bn. NatWest and AIB have signed a Memorandum of Understanding in this regard. Ulster Bank staff wholly or mainly assigned to this loan book may transfer to AIB in line with the Memorandum of Understanding. NatWest also confirmed that it was in negotiation with Permanent TSB in relation to certain retail and SME assets, liabilities and operations.

If a successful proposal emerges from the negotiations between NatWest and AIB and/or NatWest and PTSB, that requires the Government’s backing as shareholder, given the likely monetary size off a transaction, and the public interest, I would anticipate that any transaction involving PTSB or AIB, would require consultation with me in line with the Relationship Frameworks. It is important to note the consultation process gives me the opportunity to express my views, but I have no right of veto.

Both sets of negotiations are at an early stage. The potential consequences for the Exchequer cannot be considered until after the negotiations have concluded. If a successful proposal emerges from these discussions which is in the best interest of the economy, consumers, SMEs and the wider banking sector, I anticipate that I will be supportive in this regard.