Finance firm Goldman Sachs has got €7m to date from State

The financial services firm appointed by Finance Minister Michael Noonan this week to advise on the capital restructuring of Allied Irish Banks has received more than €7m from the State since the banking crisis.

The National Treasury Management Agency (NTMA) paid €7.7m to Goldman Sachs International for advice in relation to three separate issues between 2010 and 2013.

The global investment bank advised NTMA on liability exercises and capital-raising transactions in relation to AIB, Bank of Ireland, EBS Building Society and Irish Life & Permanent, between 2011 and 2013.

Over the same period, Goldman also advised the government on the sale of Irish Life to Great-West Lifeco for €1.3bn in 2013.

Goldman received €7.35m for its role in the two processes.

Previously, NTMA paid the investment bank €362,000 for advice given in relation to Anglo Irish Bank.

The figures were detailed in Mr Noonan’s response to a parliamentary question put down by Fianna Fáil finance spokesperson Michael McGrath.

Earlier this week, the minister confirmed that Goldman had been appointed on a pro-bono basis to advise the government in advance of a possible sale.

The contract was awarded following a tendering process in which 11 firms were invited to submit a tender.

Mr McGrath expressed concern, however, saying: “The one thing we can say for certain is there is no such thing as a free lunch from a global investment bank. It seems pretty obvious that by doing this work pro bono, Goldman Sachs is positioning itself to win a tender to advise the government on the sale of a stake in AIB.

“If the government decides to sell all or part of AIB, then Goldman Sachs will be in pole position to win the consultancy contract by virtue of having advised the government on reorganising the bank’s capital structure,” Mr McGrath said.

Mr Noonan described the contract with Goldman as a “good outcome” and added that it is not unusual internationally for firms to do high-profile work with governments on a pro bono basis.

The State owns 99.8% of AIB’s ordinary shares, as well as €3.5bn in preference shares and €1.6bn in contingent convertible capital notes (CoCos).


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