Bank stakes will not be ‘sold off cheaply’

If the Government offloads its stakes in Bank of Ireland and AIB, it will only do so for a price much higher than the value of €8bn by the National Pension Reserve Fund, said Finance Minister Michael Noonan.

The Government is in negotiations with the Troika about restructuring the €64bn used to rescue the banking system. Just under €30bn was pumped into AIB, Bank of Ireland and Irish Life & Permanent with the remaining €34bn in the form of promissory notes for Anglo Irish Bank.

A Finance spokesman says the purpose of the troika talks is to break the link between the sovereign and banking debt. If the Government was to sell its stake in the banks for €8bn, then it would be giving away future upside potential and still be lumbered with €22bn in debt it cost the State in bailout funds.