State’s holding in AIB rose 25% to €11.7bn in 2015

Total value of Irish Strategic Investment Fund rose almost 11% over first year

The State’s holding in AIB was worth €11.7 billion at the end of last year, according to the latest estimates from the NTMA, a rise of more than 25 per cent on one year earlier.

The figures, contained in a performance update from the Irish Strategic Investment Fund – part of the NTMA – estimate that, in total, the remaining stakes in AIB and Bank of Ireland are worth €13.5 billion.

At the end of 2014 the NTMA accounts estimated the remaining stake in AIB was worth the same amount – €11.7 billion. However this earlier figure included €1.9 billion in preference shares then held by the State in AIB. In the meantime AIB has redeemed these preference shares. This cash was repaid by the bank to the fund , which held the shares and the update confirms that the cash was subsequently repaid to the exchequer.

Excluding the preference shares and other smaller transactions which took place as part of the restructuring of AIB shares undertaken last year shows a significant increase in the estimated value of the State’s AIB holding over the past year. The State owns 99.9 per cent of AIB and the government had announced its intention to float around 25 per cent of these on the market later this year. However this will now be a matter for the incoming government to decide on.

The AIB holding is part of the €13.5 billion directed portfolio of investments made by the fund, which is under the direction of the Minister for Finance and also includes public policy investments in Bank of Ireland and Strategic Banking Corporation.

The portfolio generated a 15.3 per cent return on its investment over the year.

The fund also includes a discretionary portfolio that comprises equity investments, government bonds and , with €7.9 billion at its disposal.

That generated a 1.5 per cent return since the fund’s investment on December 22nd 2014.

Overall, the value of the fund’s holdings rose almost 11 per cent in its first year.

The ISIF is also developing a connectivity fund that will work to enhance physical and virtual connectivity both within and for the State, with €335 million at its disposal.

The fund received €335 million from the Minister for Finance to develop the fund,

The ISIF was set up as a successor to the National Pensions Reserve Fund in 2014, aimed at investing on a commercial basis to support economic activity and employment in the State. By December 2015, ISIF had committed €2 billion to investments in Ireland, and was close to completing on six investments with a value of €200 million.

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