Friday 23 February 2018

Noonan admits €7.8m pay day for Goldman Sachs


Laura Noonan

INVESTMENT bank Goldman Sachs could be paid as much as €7.8m for advising the Government on the upcoming recapitalisation of Ireland's banks, Finance Minister Michael Noonan has confirmed.

Goldman's big pay day was revealed in an answer to a parliamentary question from Sinn Fein finance spokesman Pearse Doherty, who asked for details on the professional fees linked to July's €24bn recapitalisation.

AIB, Irish Life & Permanent (IL&P) and the National Treasury Management Agency (NTMA) had previously declined to give details of their fees to this newspaper. BoI has publicly said it expected to pay about €150m for its €5.35bn capital raise.

The information provided to Mr Doherty sheds more light on the professional fees bonanza behind the industry-wide recapitalisation, and includes details on spends by IL&P, AIB and the NTMA as well as more information on BoI's spend.

Mr Noonan told Mr Doherty that the NTMA had appointed London investment banking giant Goldman Sachs as corporate finance advisers to evaluate the banks' plans.

"Fees of up to €7.8m may be payable depending on the completion of transactions and performance," Mr Noonan added, stressing that Goldman was appointed "following a competitive tender evaluation".

An NTMA spokesman declined to comment on the extent of Goldman's fees. The recapitalisation brief represents the second recent NTMA appointment in favour of Goldman, which also advised on Anglo's plan to take over Quinn Insurance. As well as Goldman, the NTMA is also forking out for a legal panel to evaluate the banks' recapitalisation plans, Mr Noonan confirmed.

The panel, which includes A&L Goodbody, Arthur Cox and Matheson Ormsby Prentice, was appointed following a "competitive tender process" and offers "significantly discounted fees" to the NTMA banking unit.

The Finance Minister said AIB had so far spent "circa €6.25m" on its recapitalisation efforts. "AIB's capital raising is not complete so further unquantified fees will be incurred," he added.

IL&P, meanwhile, has spent €2m on "lawyers, investment advisers and underwriters".

"There will be further significant amounts due in relation to the Initial Public Offering/disposal of the life assurance company and other banking business," Mr Noonan added.

The sale of Irish Life Assurance could trigger fees in the tens of millions, market sources say.

The Central Bank, meanwhile, has already confirmed it paid €30m to advisers to carry out the stress tests which set the level of the bank recapitalisations.

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