Written Answers. - Parliamentary Debates - Houses of the Oireachtas

Questions— 14 February 2012. Written Answers
agreement is for this company to advise upon the UK commercial loan book and if not, if he
will detail what the company may have appointed to advise IBRC upon; the duration and cost
of such a retention agreement; if such a retention agreement prevents one of the largest distressed
debt purchasers in the world the company to purchase any IBRC assets; and if he will
make a statement on the matter. [7689/12]
Minister for Finance (Deputy Michael Noonan): While IBRC is wholly State owned, it is not
formally covered by public procurement rules as its commercial remit makes it subject to
market forces. Under the Relationship Framework the Board of the bank is responsible for
the day to day operations of the bank. The bank has retained the services of the ‘strategic
advisory arm’ of the Group, referred to in the question. The bank has previously been
requested by my Department to confirm that there is no conflict in relation to the appointment.
The bank obtained independent advice that this entity operates independently of the ‘investment
arm’ of the Group. The appointment was made having regard for the Bank’s procurement
policy. Details of the terms and purpose of the bank’s appointment of this advisor are commercially
sensitive and it is not appropriate to disclose such information.
State Aid
147. Deputy Gerry Adams asked the Minister for Finance if with respect to the disposal of
bank assets in IBRC that a clear model in accordance with EU state aid rules has been formulated
in the event IBRC decides to proceed with specific asset sales; if disposal of IBRC assets
shall always be sold directly by the bank or through a third party; if he will outline if asset
disposal by IBRC can be done in accordance with EU state aid rules without the appointment
of a third party adviser; and if he will make a statement on the matter. [7690/12]
Minister for Finance (Deputy Michael Noonan): IBRC is bound to adhere to the requirements
of the EU Commission state aid decision on the revised restructuring plan for Anglo
Irish Bank and Irish Nationwide Building Society. The commitments set out in the decision
are monitored by a monitoring trustee approved by the Commission. The Commission decision
does not determine whether or how assets should be sold by the Bank or through a third party.
The Bank has the capacity to either use third party advisors or sell directly and in practice both
mechanisms are used in order to achieve the most economically advantageous result for the
taxpayer. The Bank does have a robust procurement policy and process for the appointment
of any advisors or other providers of services to the Bank and this is used in support of the
sales process.
148. Deputy Gerry Adams asked the Minister for Finance if he will outline if with respect
to disposal of bank assets in Allied Irish Bank that a clear model in accordance with EU state
aid rules has been formulated in the event Allied Irish Bank decides to proceed with specific
asset sales; if he will explain if disposal of Allied Irish Banks assets shall always be sold directly
by the bank or through a third party; if asset disposals by Allied Irish Bank can be done in
accordance with EU state aid rules without the appointment of a third party advisor; and if he
will make a statement on the matter. [7691/12]
Minister for Finance (Deputy Michael Noonan): As the Deputy will be aware, a key component
of the Financial Measures Programme is the establishment of deleveraging plans to reduce
the Irish banking system to an appropriate size and to stabilise its funding base. The Central
Bank has agreed with the troika that a sustainable Loan to Deposit Ratio for the aggregate
domestic banking system is 122.5%. As a first step in the Financial Measures Programme
process, banks were instructed to segregate their loan assets strategically into core and non-
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