Dáil Éireann Debate, Tuesday - 26 May 2026
144. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the reason €7.7 billion in proceeds from the sale of AIB shares is sitting, uninvested, with the Ireland Strategic Investment Fund, ISIF. [39793/26]
View answerIt has come to light that the proceeds of selling off the State's assets in the form of the shareholding in AIB is still sitting with the ISIF and is losing value. How has this been allowed to happen under the watch of the Tánaiste and his predecessor as Minister for Finance? What action is he going to take to address it? This is a significant amount of money that is losing value at a time when the Tánaiste has been running around and telling people that they need to get a return on their own investments. We have millions of euro losing value under his watch.
I would be interested to one day tease through the Deputy's view on the investment accounts. I hope that is something he might consider supporting.
As the Deputy is aware, ISIF is composed of the discretionary portfolio and the directed portfolio. ISIF holds the directed portfolio under direction from the Minister for Finance, comprising receipts of bank share sales. The National Treasury Management Agency, NTMA, has advised that at the end of 2024, the directed portfolio had a value of €7.7 billion, composed of ordinary shares in AIB, valued at the market price of €5.31 per share; €5 billion in cash and cash equivalents, including commitments of €165 million to the Strategic Banking Corporation of Ireland, SBCI; and a €305 million loan to Home Building Finance Ireland, HBFI.
Of the cash and cash equivalents, €4.838 billion was invested in Irish Exchequer notes. Exchequer notes help to ensure capital preservation and are relatively liquid, which is an important consideration to meet the timing and quantum of transfers out of the directed portfolio. The majority of the portfolio is now in Exchequer notes. The resources are actively being drawn down to support major infrastructure investment priorities.
The end of 2025 position will be disclosed in the 2025 financial statements, which will be published in the coming months. The unaudited end of 2025 value of the directed portfolio was €6.4 billion and since the end of 2025, the value of the portfolio has been further reduced due to drawdowns to the Exchequer on foot of directions. The figure of €7.7 billion was at the end of 2024 and the unaudited end of 2025 value was €6.4 billion.
As part of budget 2025, the Government decided to use €3 billion of the proceeds from bank share disposals to provide funding for infrastructure, including water, housing and the electricity grid, and in the case of housing and water is additional to ongoing Exchequer expenditure. In 2025, €514 million of the €1 billion allocated for Uisce Éireann was paid over. The remaining balance will be paid over the period out to 2028. In late 2025, a further €750 million was drawn from the directed portfolio to provide funding for investment in the electricity grid. The balance of €1.25 billion is for the Land Development Agency. The remainder of the directed portfolio is intended to be used in support of the national development plan. These are one-off receipts to support infrastructure development.
I have always been of the view that the State should have retained ownership of AIB. It was a mistake to sell off the shares. Fine Gael has a different ideological point of view and wanted the bank back in private ownership and is entitled to hold that opinion. However, the ideological position has come at a real financial cost. I think we can accept that now with the benefit of hindsight. The public AIB share was sold off at one of the worst times. When the Government started selling shares, they cost €2.32. They are now worth over €10. That shareholding would today be worth €16 billion before we even talk about the massive dividends that we no longer get from the bank. What we have instead is less than half of that sum. Worse still is that the Government sold off the public shares at that time and just left large portions of the proceeds sitting there. It did not use the money to build the necessary infrastructure. The money is losing value. That is the issue. The Tánaiste talked about Exchequer returns, but it is circular. It is in the State and getting a very low return. There is no actual return. It is a net zero return.
Does the Tánaiste accept that if we held those shares, they would be worth twice what we have now? That money should at least be getting some return as it sits in the ISIF account.
I appreciate the different political, ideological or policy positions on bank ownership. It is legitimate for people to hold different views on these subjects. The stated intention of the Government, and I think successive Governments, was to seek to return those banks to private ownership and to seek to recoup the money that the taxpayer had put into those banks, namely, AIB, Bank of Ireland and PTSB. That objective was largely fulfilled. I do not think the State should be in the business of owning banks. We all know how we ended up in that position as a State and it certainly was not by some sort of design. It was because of the financial crash and the chaos that ensued.
I am conscious that I am reading out a lot of figures and I am happy to send the Deputy a detailed note on the issue. I would just point out that the assertion around €7.7 billion was at a point in time at the end of 2024. What I have tried to do this evening is to update the Deputy on the current position because we have seen that number reduce as the result of investment decisions we have made, including for infrastructure projects. I will send the Deputy a note.
I appreciate what the Tánaiste has put on the record, that there was a reduction from €7.7 billion to a figure over €6 billion in the period of a year. However, it does not matter if the total is €7.7 billion or €6 billion. The money is sitting there and not making any return. It is in Exchequer notes, which means that the State is paying another organ of the State the 1%. It is making no return. It is financial mismanagement, on top of the fact that the Government sold the shares at one of the worst times. These shares would have been worth twice what we got for them if the Government held them today. We would be getting hundreds of millions of euro in dividends. This is serious financial mismanagement that the Comptroller and Auditor General should be exploring. We are not talking about hundreds of millions, or hundreds of thousands wasted on a bike shed or the €50 million wasted on the Irish Rail IT project. We are talking about billions of euro that has gone amiss as a result of selling the shares in AIB at the wrong time and then putting the proceeds from the sale of those shares in a fund that gets absolutely no return when inflation is running at 3.7%.
The Comptroller and Auditor General is welcome to look at anything he wishes to look at. Indeed, it was the Comptroller and Auditor General who put that figure on the record of the Committee of Public Accounts on 14 May and it was a figure for the end of 2024. It was a moment in time and the Government has thankfully been in a position to make a number of decisions about what to do with that resource, including investing in infrastructure such as water, housing and the electricity grid. There is no question of waste. There is a question of correct deployment of a one-off resource to try to improve critical infrastructure, particularly around water, housing and electricity.
I am looking at the end of the ISIF's 2024 financial statements. The ISIF discloses its direct portfolio total interest income in its financial statements and the end of the 2024 financial statements states the interest income earned in 2024 was €126 million. The position at the end of 2025 will be disclosed in the 2025 financial statements.
Thank you, Tánaiste. We move to Question No. 145
Who paid the interest? Was it the other organ of the State?
The ISIF does not disclose the terms of individual investments.
It is an Exchequer note, which means it is the other organ of the State. It makes a mockery of it.
Thank you, Deputy Doherty.
