Will PTSB sale leave taxpayers in profit after bailing out the banks?
Michael McAleer
Austrian banking group Bawag has struck a deal to buy PTSB for almost €1.62 billion, winning out against two private equity bids for the 57.5 per cent State-owned lender as the sale process came to a head.
The deal, subject to shareholder approval, will see the Government receive €931 million for its stake, which would bring the total cash recovery on PTSB’s €4 billion crisis-era bailout to about €3.73 billion. It is expected to be completed by the end of this year or early 2027.
So will the taxpayer make a profit on this sale?
Irish taxpayers will end up recouping €30.7 billion from the three surviving Irish banks - AIB, Bank of Ireland and PTSB - on a cash-in, cash-out basis, following their combined €29.3 billion in bailouts between 2009 and 2011.
The Department of Finance has put a higher recovery of about €4 billion from PTSB, which includes bank levy payments and fees.
A €2 billion surplus generated by Bank of Ireland has more than offset small shortfalls at the other two banks. The Government sold its final AIB shares last year, while the last Bank of Ireland shares were disposed of in 2022.
The cash recovery from the sector includes money made from share sales in the banks, redemption of bailout bonds, interest, guarantee fees and dividends over the past decade and a half.
It's probably going to be the end of this year and into next year before the PTSB is done.
However, none of this takes account of the vast sums sunk into Anglo Irish Bank and Irish Nationwide Building Society (INBS).
How much did the Irish State put into Anglo and INBS?
Anglo Irish Bank and INBS required a combined €34.7 billion bailout before they collapsed. The two institutions were merged into Irish Bank Resolution Corporation (IBRC) and later liquidated, with some of the assets going into Nama.
The IBRC liquidators have so far handed over €360 million of surplus cash to the exchequer from the wind-up. That is in addition to €1.7 billion repaid to the State for a government guarantee scheme being tapped as part of the 2013 liquidation.
The final tally will be complicated by the fact that the exchequer has also received billions of euros of gains from the Central Bank over the past decade from the sale of government bonds used in a complicated refinancing of much of the €34.7 billion rescue.
The Government is preparing a Bill that would pave the way for the conclusion of the special liquidation of IBRC and dissolution of the fellow loans-resolution vehicle, the National Asset Management Agency (Nama).
But in summary, the State is still down about €30 billion in relation to Anglo and INBS. That's the equivalent of the funding for the entire health service for a year.
