Investor roadshow tests opinions of Irish economy and banking sector

The Department of Finance conducted a roadshow of investors last week to test their opinion of the Irish economy and our banking sector. It is understood that officials from the department met more than 15 institutional investors in New York and London during the week.

The move comes as the Government ponders pressing the button on a sale of shares in AIB to investors via a stock market listing in Dublin and London.

The Minister for Finance Michael Noonan has indicated than an initial public offering of AIB shares could happen between mid May and early July.

It is understood officials received a broadly positive response from the investors, in spite of uncertainties created by Brexit and Donald Trump’s election to the White House.

Veneto Banca liquidates wholesale banking arm in Ireland

---

Interest-free credit cards a ‘ticking time bomb’, bankers fear

---

Former AIB chief banks on AI as he takes on UK big four

---

New mortgage arrears scheme ‘could keep people in homes’

---

The roadshow coincided with largely positive trading updates from both AIB and Bank of Ireland last week, with both reporting increases in new lending, and strong capital levels.

In addition, the department has posted a 26-page update on the Irish economy on its website for investors to access. It provides a range of forecasts for the Irish economy with real GDP growth of 4.3 per cent pencilled in for this year, and reducing each year out to 2021 when the annual rate is estimated at 2.5 per cent.

Our debt-to-GDP ratio is forecast to decline from 78.6 per cent this year to 62.8 per cent in 2021.

Lack of housing supply

It also notes a number of policy challenges including, a lack of housing supply, legacy debt, credit appetite, the global tax environment, and the high level of non-performing loans still held by the banks,

On the banking sector, the presentation states that the Government’s policy is that the banks should be privately owned, with the State to exit its holdings in a “manner that generates value for the taxpayer”.

It puts a figure of €13 billion on the current value of the State's holdings in AIB, Bank of Ireland and Permanent TSB and details the €15 billion in proceeds received to date through disposals, fees and interest income from the banks.

“We are committed to recovering the €29 billion invested in AIB, Bank of Ireland and Permanent TSB over time,” it adds.

The presentation reminds the investors that the minority government’s programme agreement allows for the sale of up to 25 per cent of AIB before the end of 2018.

It also states that the Government is “not under pressure” to exit its remaining investments – a 99.9 per cent stake in AIB, 75 per cent in PTSB and 14 per cent in Bank of Ireland.