Wednesday, January 9, 2013

€14 billion in Bank Assets

Today’s sale of a €1 billion contingent convertible capital note (a form of subordinated bond) in Bank of Ireland brings the assets the State holds in the banks into focus.

There is another €1.6 billion of these bonds held from AIB and €0.4 billion from PTSB.  The NPRF holds the State’s preference and ordinary shares in AIB and BOI.  These are currently valued at €8.6 billion.  The Minister for Finance holds the State’s 99.75% holding in PTSB but no value is put on this.  The same goes for Irish Life which it is hoped can be sold for €1.3 billion.

All told, the State probably has about €14 billion of remaining assets in the ‘viable’ banks.

  • €2 billion contingent convertible notes in AIB and PTSB
  • €8.6 billion of preference and ordinary shares in AIB and BOI
  • €1.3 billion through ownership of Irish Life
  • 99.75% shareholding in PTSB

These valuations for AIB and PTSB are questionable as BOI is the only bank the State has been able to sell anything from.  Still it is better to be seeing the banks as vehicles for reducing our government debt levels rather than sinkholes to increase it, not that that problem has completely gone away.

No comments:

Post a Comment

€14 billion in Bank Assets @ Unsecured Loans Proudly Powered by Blogger