Government has put out tender for adviser on AIB

Michael Noonan says AIB back in profit and has passed European Central Bank’s stress tests

The Department of Finance has tendered for an adviser to assist it in dealing with its strategic options for AIB. It will choose from one of the three panels of advisers that were established earlier this year for the purposes of advising the State on its bank shareholdings.

This has been confirmed by Minister for Finance Michael Noonan in a written answer to a question from Michael McGrath, finance spokesman for Fianna Fáil.

“In light of the size and importance of our AIB investments, we expect to have financial advisers in place early in 2015 to assist us with our decision-making around the bank’s capital structure,” the Minister said. “We recently invited all the firms in ’Panel/Lot One’, which covers capital markets, strategic, mergers and acquisitions, and restructuring advice to participate in a . . . more streamlined and tailored tender process relating to AIB. This process is under way and is expected to be completed in the coming weeks.”

This panel comprises 11 groups: Bank of America Merrill Lynch, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Lazard, Nomura, Rothschild and UBS.


Back in profit

Mr Noonan said that now that AIB was back in profit and had passed the European Central Bank’s stress tests, officials at the department would engage with its management to “explore how we can reconfigure the bank’s capital structure to make it fit for purpose”.

“We hope to agree a roadmap that will see the bank start to return cash to the State so we begin the process of repaying the taxpayers’ large investment,” the Minister added.

No rush

Mr Noonan reiterated his recent comments that the Government was in no rush to offload some or all of its 99.8 per cent shareholding in AIB, which received a €20.8 billion bailout from the State.

“We are not making any decisions around reducing our ownership in the bank at this stage,” he said.

“If we can deliver on the capital structure work programme next year, and everything else develops as we would like, then we may be at the point where we can consider selling some of our shares.”

Mr McGrath called for the Government to allow the Comptroller & Auditor General (C&AG) to scrutinise the process involving AIB.

“The State is in the midst of selling off tens of billions of banking-related loans and shareholdings, yet there is almost no scrutiny in the Dáil of how this takes place,” Mr McGrath said.

“The C&AG needs to be able to look at all aspects of this from the tendering for advisers to the sales process itself to ensure that the interests of taxpayers are being protected.”

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times