Friday 23 February 2018

Noonan could sell part of AIB stake before 2016 election

AIB
AIB

Thomas Molloy in Davos

The Government could look to line up a sale of part of its stake in bailed-out AIB before the next election in 2016.

Finance Minister Michael Noonan said yesterday that he could try to "test the market" with a smaller sale in order to establish a valuation for the bank.

In the meantime selling taxpayers' 14pc holding in Bank of Ireland is just a matter of price, he said. He made the comments in an interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland.

The €20.7bn the cost of rescuing AIB was the second most expensive of the Irish bank bailouts, after Anglo Irish Bank.

Management at AIB have said they think the bank will return to profit over the coming year.

Stemming losses is thought to be a prerequisite for new private sector investment through a partial share sale.

Yesterday Michael Noonan indicated that establishing a valuation for the State's AIB shares would help to work out the true position of the national finances – in particular "net debt," the national debt less the value of investments.

The national debt is "entirely sustainable," he said, despite the debt figure heading for 123pc of the size of the economy.

Borrowing will decline as the State "runs down" borrowings that are currently held to cover the State's running costs into 2015.

The minister said he does not expect any of the Irish banks to need fresh capital, after their financial strength is "stress tested" by European banking authorities later this year.

Meanwhile, Taoiseach Enda Kenny said: "Just because we've exited the bailout doesn't mean we (don't) still have hills to climb – we have, and many of them are really challenging.

"Our people have always been pragmatic, we've always been productive, and never afraid of hard work. And I believe that the story of Ireland in the last three years is a story we intend to continue in the time ahead."

Mr Kenny added, however, that Ireland will not become complacent as we bid to fix our public finances and restructure the banking sector, which are still major challenges.

Irish Independent

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