Decision on sale of banks seen as priority

THE Minister for Finance, Mr Quinn, realises the need to make a decision "as soon as possible the future of TSB Bank and the state banks ICC and ACC, to their managements to plan the future, according to a spokesman. However, no dead appears to have been set to resolve the long running issue.

Late last year a Cabinet sub committee considered a proposal to sell around 75 per cent of TSB. Government sources differ on the precise outcome of the meeting, but it appears a consensus was emerging to go ahead with the TSB sale and consider the future of ICC and ACC banks at a later stage.

The State's retention of a 25 per cent stake would have given it a smaller stake of an enlarged institution formed after the purchase of TSB, probably by Ulster Bank or National Australia Bank. A mechanism would have, allowed the new owner to buy out the shares, or the state to force such a purchase, after five to seven years.

However, despite the broad agreement - which also set out criteria for prospective purchasers - there has been no move since on the TSB sale.

A spokesman for the Tanaiste, Mr Spring, yesterday described as "absolutely without foundation" a weekend report that he was blocking the sale.

The Labour Party has previously favoured the merger of ICC and ACC into a larger state owned institution, possibly with links to An Post, while Fine Gael would prefer to sell off all or part of the two banks. However, it is not clear what is holding up the TSB sale.