Serious strategic thinking on role of AIB required - Pearse Doherty TD
Sinn Féin Finance Spokesperson Pearse Doherty TD has said it is “time for serious strategic thinking on the role of AIB in our economy to take place” following today’s announcement on capital restructuring by the bank.
He added that despite spin suggesting otherwise the fact is that AIB is a long way from repaying the Irish people.
Deputy Doherty said:
“Today’s announcement of a capital restructuring by AIB presents an opportunity to stop and reflect on the nature of the relationship between the State and banking.
“The recent Comptroller and Auditor General Report showed the true cost of the bailout went beyond the recapitalisation costs with interest and other costs paid on the bank bailout still costing the State every year.
“In fact the headline figure to be repaid of €3.3bn would not even cover the €3.68bn cost of servicing the debt the State accrued to save AIB as highlighted by the Comptroller and Auditor General.
“That is the context in which serious strategic thinking into the role of AIB in particular and the broader banking sector should now take place. Former NTMA Chief Executive and current AIB Director Michael Somers, speaking to the Banking Inquiry, poured cold water on the idea of a gradual sale of AIB suggesting that it could be more beneficial to the State to receive the annual dividends from a now profitable AIB.
“In a recent reply to a question I posed the Minister said he expects dividends and interest payments of €440m from AIB in 2016. Mr Somers suggested that a sale might only see savings of just over €200m on debt servicing costs as any benefits would be used to reduce the State's debt which would only reduce the debt servicing costs marginally.
“It is clear that the government has given up on retrospective recapitalisation which could have seen the full €21bn recapitalisation cost recouped through the ESM. It has become abundantly obvious that despite the promises of a ‘game changes’ and a ‘seismic shift’ the opportunity to do this has not been taken.
“Sinn Féin calls on the Minister to begin a full and proper debate with all parties as to how the State should use this share holding and the share holdings in the other banks to benefit the Irish people.”