Noonan: State will recoup AIB money over 10 years

Finance Minister Michael Noonan says he won’t sell more than 25% of AIB in a first step toward private ownership, with October the earliest time for the Government to reduce its stake.

“I don’t think the window of opportunity arises until October, November of this year” to start selling AIB shares “but there are other windows that emerge in 2016”, Mr Noonan said in London yesterday.

“The fact that there’s an election in 2016 won’t change the timeline,” he said.

AIB, which is 99.8% state owned, will probably have a new chief executive within two months, according to Mr Noonan. David Duffy, who was appointed CEO in 2011, said in January he’ll join National Australia Bank’s Clydesdale Bank in Glasgow.

Bernard Byrne, director of personal, business and corporate banking at AIB, is the bookmaker’s favourite to succeed Mr Duffy.

Mr Noonan said his objective is to recoup the state aid. “I’d be surprised if it wasn’t done in 10 years,” he said.

The Government probably won’t sell its remaining 14% stake in Bank of Ireland, the nation’s largest lender, before elections, scheduled by early April 2016, according to Mr Noonan, adding “we’re under no pressure”.

Also in a Bloomberg interview, Mr Noonan said that Greece should seek to reduce interest rates on its debts and push for later repayment dates rather than the “nuclear” options of leaving the eurozone and writing off loans.

“There’s a middle road and it’s along the lines of what we did in Ireland. You negotiate to make your debt more sustainable, even without getting debt writeoffs.”

Ireland, which sought a €67.5bn international rescue in 2010 amid the worst property crash in western Europe, has emerged from an era of austerity, according to the minister.

The country has cut interest repayments by more than €10bn through negotiations and reduced the amount it will have to borrow over the next decade by €20bn by extending the maturities on some loans, he stated.

“There’s a number of moving parts. It’s a question of agreeing on the parts that move to make the debt more sustainable and it’s in that space the negotiations can take place,” Mr Noonan said.

Bloomberg