THE BAILOUT of the banking sector could cost the public more than €50 billion, according to the report of the Comptroller & Auditor General John Buckley.
This is the equivalent of approximately 40 per cent of last year’s gross national product or 150 per cent of last year’s total tax take.
Mr Buckley’s report said the latest assessment carried out by the Central Bank was that €71 billion was required to recapitalise financial institutions; €65 billion of this has been provided by the State.
However Mr Buckley said that based on assumptions implicit in the Financial Measures Programme Report drafted for the Central Bank, the associated asset value of the banks after they have made good their losses, will be between €14 billion and €21 billion by 2013.
Not all of this will be owned by the State, which owns AIB and Irish Life and Permanent but just 15 per cent of Bank of Ireland. Some residual value may emerge from the capital injected into Anglo and Irish Nationwide.
The report said banking, legal and accountancy consultants had been paid more than €73 million from 2008 to June this year by State agencies involved in addressing the bank crisis.
Banking consultants were the most costly group, with their total costs reaching €35 million, almost €20 million of which was paid by the Central Bank. The National Treasury Management Agency paid €15 million to banking consultants over the period.
Legal services cost €22.4 million, with the Department of Finance accounting for €13 million of this, accountancy services cost €15.6 million, other banking measures cost €39.6 million in the 2008 to June 2011 period, while “crisis management” cost €2.4 million.
The C&AG suggested that given the role the State now had in the banking sector, thought should be given to how its investment might best be consolidated and managed.
Nama has acquired bank loans with an original book value of €71 billion for €30.2 billion. In its first year of operation a further impairment provision of €1.5 billion has been recognised in the Nama accounts, largely due to the continued fall in property values.