Housing Minister to bring emergency legislation to Cabinet to extend RPZs

Emergency legislation to extend Rent Pressure Zones nationwide will be brought to Cabinet this Tuesday morning by Housing Minister James Browne. It follows criticism from the opposition that the plans to extend the Rent Pressure Zones (RPZs) nationwide were not brought to Cabinet last week as part of the Government's plans to change the rental system.
It is understood that Minister Browne will see the publication of the Residential Tenancies (Amendment) Bill 2025 as 'emergency legislation' that can be 'progressed as a priority.' This will extend the RPZs to all areas of the country until February 2026, ahead of the new rent controls coming in from March 1.
This will protect approximately 17% of tenancies nationally that are currently outside RPZ, sources said last night. Currently, those outside RPZs are not protected by a restriction on rent increases, other than not charging above market rent.
Sources stressed that almost 200,0000 current tenancies will 'not be impacted whatsoever' by the measures proposed by Government. They will see their current 2% rent pressure zone cap remain, and will not have their rents reset every six years.
The Irish Mirror understands that the legislation will be placed on the Dáil schedule 'almost immediately' once it is approved by Cabinet.
It is also understood the 'role and remit' of the country's Land Development Agency (LDA) will be expanded by a decision at Cabinet brought by Minister Browne. Government is set to agree to enable the LDA to secure additional housing.
It is also understood the Cabinet will agree that project level commitments by the LDA would no longer have to be reviewed by NewERA to ensure speed and efficiency.
Under the plans, the LDA will now support a wider area of homes delivery beyond the current locations of the LDA remit and seek out and activate additional and strategic public land sites to deliver, such as urban brownfield sites.
It will for stronger land transfer powers owned by commercial state bodies, particularly when it comes to underutilised State lands and the LDA will work with Browne's housing activation office in master planning. Policy and legislative changes will now be finalised and a memo will be brought to Government in the near future.
It is understood that former HSE Chief Paul Reid is expected to be named as the chairperson of the newly overhauled An Coimisiún Pleanála, which will replace An Bord Pleanála.
Higher Education Minister James Lawless will bring the Heads of a Bill to unlock €1.5bn for the National Training Fund. This will see €650m in core funding package for Higher Education (€150m per annum).
It will also include €600m capital uplift including €150m to provide training facilities in the areas of Veterinary, Medicine, Nursing, Pharmacy and Dentistry, €150m for the upgrading and decarbonisation of the third level estate, €150m capital funding for the Further Education and Training Sector and €150m for research including research infrastructure and an increase in the PhD stipend. The Bill will also contain €235m in one-off current funding for skills and apprenticeships.
Social Protection Minister Dara Calleary will bring an amendment to the Bereaved Partners Bill, which will 'tackle economic crime'. It will allow a Social Welfare Inspector or an Authorised Officer from the Department of Social Protection to, at the behest and invitation of An Garda Síochána, participate in the interview of a detained suspect regarding offences under the Social Welfare Act.
Minister for Agriculture Martin Heydon will update Cabinet on the first interim report by the Timber in Construction Steering Group. which Minister Michael Healy Rae has also been working on.
It recommends that Ireland needs to use more wood in construction and we 'embrace' best practice in countries where timber is the material of choice. It should also look toward a 'Wood First' procurement policy advocating for all publicly procured buildings to be constructed using materials primarily of timber and other bio-based products.
Finance Minister Paschal Donohoe will seek approval for committee stage amendments to the Local Property Tax Bill, including one that relates to property adapted for use by disabled persons. This will provide for a reduction of €105,000 in the chargeable value of a property which has been adapted for use by a disabled person, subject to certain criteria being met. This is an increase from €50,000 in the 2012 Act.
Taoiseach Micheál Martin, alongside Minister Donohoe and Public Expenditure Minister Jack Chambers, will look to publish the Analysis of Well-Being in Ireland report for 2025, which will be used to help set out priorities for Budget 2026. It uses a dashboard of 35 indicators of well-being divided across 11 sections.
The report shows the progress Ireland has made over the past five years, both in terms of the trend and in comparison to international peers. Progress was seen in Income and Wealth; Connections, Community and Participation; and Work and Job Quality.
The analysis also identifies areas where work is needed, highlighting that unemployed people, younger workers, people in bad health, single-parent households, lower income households, and renters paying market rates are faring less well than other groups in society.
Elsewhere, Tánaiste Simon Harris will outline the preparations underway for Ireland's presidency of the European Union next year. During the presidency term there will be 23 informal Ministerial meetings hosted in Ireland and a quarter of them will be held outside Dublin.
There will also be a summit of the European Political Community and an informal meeting of the European Council, both of which will take place in Dublin.

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High cost of IP housing 'not sustainable'

The Minister of State for Migration has acknowledged the high costs of providing accommodation for International Protection applicants and Ukrainian refugees, which he said was "neither sustainable nor acceptable in the long term". The State spent more than €401m on accommodation for International Protection applicants and Ukrainian refugees in the first three months of the year. That is according to new figures released by the former Department of Integration detailing its spending for the first quarter of 2025. In a statement, Minister Colm Brophy said the State had engaged in a series of actions to reduce these costs. He said this includes: "The purchase of State-owned facilities which will reduce costs and save the State 100s of millions in a relatively short period of time. "The renegotiation downwards of existing contracts with IPAS and Ukrainian accommodation providers. "The introduction of legislation this autumn will drastically shorten the length of time people stay in the system. This will reduce the overall costs of accommodation in the years ahead." The €401m figure is down on last year's quarterly spends on such accommodation, which ranged from €424m to €490m. Paying for private sector accommodation for refugees and asylum seekers made up 97% of the department's purchase order spends of €20,000 or more detailed in the Department report. While hundreds of providers are in receipt of Government payments, 91 were paid more than €1m in the first quarter of the year, and together the top five brought in €52.5m. Commenting on the figures, Nick Henderson, the CEO of the Irish Refugee Council, said it had always been concerned about money going straight to private providers. He said the Government's purchase of Citywest could be a step in the right direction and was likely to be better value for money for the taxpayer. The Citywest campus has been central to the Government's International Protection and Ukrainian refugee accommodation provision over the last number of years. However, Mr Henderson said this did not necessarily mean it would be a better-run facility. He said the IRC also had concerns that the border procedure, under the EU Migration and Asylum Pact, could be based in the future at Citywest. The IRC would also like to see an expansion of the remit of HIQA, which only has inspection powers for longer-term accommodation, expanded to include emergency accommodation.

Irish Independent

4 hours ago

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House building declined in the first three months of 2025

The volume of production was down by 4.3pc compared with the final quarter of last year. The finding will be regarding as all the more disappointing as activity in the construction sector overall was well up, increasing by 6.5pc from the last quarter of 2024 and up 19pc on an annual basis, according to figures released by the Central Statistics Office. The focus of activity in the construction industry seems to have moved towards non-residential building, with the volume index for civil engineering, for example, rising by 16.6pc. Shane O'Sullivan of the CSO said: 'On an annual basis, between Q1 2024 and Q1 of this year, production volume in construction grew by 13.5pc. During the same period, in the non-residential building sector it rose by 13.7pc, and was up by 35.9pc in the civil engineering sector, while production volume in residential building showed an annual decrease, down 10.6pc.' It is the latest disappointing set of figures for the Government, which prompted the Housing Minister, James Browne, to say on Thursday that the official target of building 41,000 new homes this year is 'not realistic'. The Central Bank has downgraded its forecast for delivery to 32,500. This follows the publication of figures for completions in the first quarter by the CSO, showing they were only 2pc up on the same period in 2024, a year that finished with just over 30,000 units being completed. Of even more concern was the 2.5pc decline in the number of homes that got planning permission in Q1, which stood at 8.177 units. The Government has responded by introducing legislation to amend the Rent Pressure Zone system, bringing every current tenancy under an RPZ. It is also expanding the remit of the Land Development Agency, and the Tanaiste, Simon Harris, has said further, unspecified measures are going to be announced between now and the Dail recess in July. Ian Lawlor, managing director of Roundtower Capital, said: 'While the volume of production in building and construction is up, the 4.3pc fall in house building activity is hugely disappointing and a further indication that the government is going to struggle to meet its housing targets this year.' 'While the rental reforms recently announced are certainly welcome, the jury is out as to just how effective they will be in stimulating housing supply,' he added. 'Other obstacles to increased supply that need to be tackled if the Government is to get more private investors on board include prohibitive development levies, VAT burdens, inadequate tax incentives, limited Public Private Partnership options, and insufficient state support for builders.'

Irish Times

10 hours ago

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How AIB, once worth less than its art collection, came back from the brink

In early March 2012, AIB's chief executive of three months, David Duffy , unveiled a swingeing plan to cut one in five jobs – 2,500 in total – to restore the ailing lender to profitability and make a start on paying back its €20.8 billion taxpayer rescue. 'If you were leaving, someone would bring out a Swiss roll and a packet of biscuits and people would gather around your desk. There was no talk of going out for a nice lunch,' recalls a former AIB staffer who went through their fair share of goodbyes at the time in the group's then headquarters in Ballsbridge . 'The contrast between the relief on the faces of those leaving and the anguish of those who were staying was often stark. It was a very difficult time to say you worked in one of the banks. If you got into a taxi at the time and were asked where you worked, you'd say something like Arnotts, given the level of public hostility towards bankers at the time. Others working in branches got the brunt of it, sometimes being spat at. The atmosphere was febrile.' Almost 13 years later – and 16 years after its initial rescue – AIB returned this week to full private ownership as the Government sold its final 2 per cent stake to market investors, at a share price almost 60 per cent above what it was when it carried out an initial public offering (IPO) of shares on the stock market eight years ago. READ MORE The Government is not alone in seeking to draw a line under crisis-era bailouts. The past month has seen Keir Starmer's administration in the UK sell its remaining shares in NatWest and the Dutch government reduce its holding in ABN Amro below 30 per cent. Elsewhere, Greece concluded the reprivatisation of its lenders late last year with the sale of a stake in National Bank of Greece. [ AIB share sale brings banker pay back into focus Opens in new window ] The sale of the final tranche of AIB shares leaves the State on track to fall about €700 million short of recovering its full rescue bill on a cash-in, cash-out basis, even after it goes about selling stock warrants held in the bank, estimated to be worth about €300 million. Still, it wasn't always a given that taxpayers would recover this much from the most expensive bailout of a surviving Irish lender – especially when AIB shares were trading below €1 apiece, a seventh of their current price, during the Covid-19 pandemic in 2020. 'It did look bleak at various points in terms of getting to this point,' said Des Carville, head of the Department of Finance's shareholding and financial advisory division, which managed the relationship with the bank. Des Carville, head of the Department of Finance's shareholding and financial advisory division 'These were risky investments. Owning equities is risky at the best of times. Owning shares in banks, as we've found out, is particularly so.' Three key factors have turned around AIB's fortunes in the past four years: a spike in interest rates globally as central banks fought inflation; the bank's return to loan-book growth after a decade and a half of contraction; and the shrinking of competition as Ulster Bank and KBC Bank Ireland exited the Republic. The biggest boost from higher interest rates has been thanks to inertia across Irish households as they continue to keep 85 per cent of their €166 billion of cash savings in on-demand and current accounts, earning little or nothing, rather than availing of rates of up to 3 per cent for certain accounts among domestic banks, including AIB. The fact that AIB's deposit base is much larger than its loan book also means that it has earned billions of euro in recent years from storing excess cash with the Central Bank of Ireland. AIB had €31.5 billion lying idle with the regulator at the end of last year. The going deposit rate across euro-zone central banks was as high as 4 per cent in 2024. Christ Cant of Autonomous Research in London, said in a report earlier this year that AIB is what Germans would call a 'eierlegende Wollmilchsau', or egg-laying woolly milk sow – a mythical jack-of-all-trades for investors. 'Amongst European banks, AIB provides an unusual combination of both exceptional capital return prospects [for investors] and strong balance sheet growth prospects, in a great zip-code,' he said, noting that the Republic was a 'structurally attractive market' and 'fiscally responsible sovereign'. Taxpayers felt over the years that bank bailouts left them holding eggs of a more sulphuric kind. AIB would lose more than €34 billion on soured loans – more than any other Irish lender – in the decade after Brian Cowen's government guaranteed the banks in September 2008, including bad-loan charges and losses on portfolio sales to the National Asset Management Agency (Nama) and overseas investment firms. The stench still lingers. Even though the Irish economy is now almost three times its Celtic Tiger peak of €197 billion in 2007, the banking crisis continues to be felt, with Irish households and businesses paying higher interest rates on loans than the EU average, creaking infrastructure and, most profoundly, a post-crash shortage of capital for residential development that has given rise to today's housing crisis. 'A real arrogance' Stephen Bell was part of a team of PwC consultants brought in to help AIB management in late 2010 as it headed into State control. 'One clear memory from my first days was sitting in an office with artwork on the walls and thinking to myself, each one of these pieces is probably worth more than the bank right now,' said Bell, who would serve as AIB's chief risk officer on secondment during 2011. AIB had an impressive collection of Irish art spanning the 1880s through the 21st century, including works from Jack B Yeats, Paul Henry, Sir John Lavery, and Roderic O'Conor. A few dozen of its best pieces would be handed over to the State after the bank succumbed to taxpayer ownership, ending up at the Crawford Art Gallery in Cork. 'There was a real arrogance about AIB ahead of the crisis. It saw itself as a multinational organisation, with its banking unit in Poland, interests in the Baltics and Bulgaria, a large stake in M&T Bank in the US, and a UK division,' said a former senior Central Bank official who dealt with the banks during the financial crisis, but who declined to be named. In the early days of the global crisis in 2007, the regulatory focus was more on Bank of Ireland because of its large mortgage book in the UK, a market where Northern Rock collapsed that September. 'Bank of Ireland had to circle the wagons earlier than AIB,' the former central banker said. It moved sooner to book large loan loss charges, setting aside €230 million for its then financial year to March 2008. [ How AIB went from boom to bust and back again Opens in new window ] AIB's hubris at the time was best captured in its decision to pay €270 million of interim dividends to shareholders that August as banks globally were hoarding capital. Two months later, then chief executive Eugene Sheehy said the bank 'would rather die than raise equity'. The bank's greater exposure than Bank of Ireland to commercial-property lending – which accounted for 36 per cent of its loan book in 2008, compared to 26 per cent at its rival – would ultimately result in it being effectively nationalised. Property and construction accounted for as little as 12 per cent of the bank's loan book in 1998. However, in 2004, AIB's then chief executive Michael Buckley set up a 'win-back team' to work out why it was losing business to Anglo Irish Bank. It subsequently ramped up lending, bankrolling big developers from Liam Carroll to Ray Grehan, whose property empires imploded during the crash. While AIB was known to have better IT systems than its main rival by the time of the crash, its decentralised commercial lending model – with local branches given significant autonomy to dole out loans – and weaker data and loan paperwork left it facing much deeper discounts from Nama when it took over risky real-estate loans. AIB transferred €20.4 billion of loans to Nama at a 56 per cent discount, while Bank of Ireland sent over half that amount, at a 43 per cent discount. 'Also, because the original management team at AIB was cleared out after the crash, it was on the back foot when it came to arguing about Nama discounts or stress tests,' the former central banker says. 'Bank of Ireland, which kept senior management and avoided State control, fought tooth and nail over everything. As it went through a number of leadership changes in the early years, AIB lost all continuity, strategic direction and became more risk averse for an extended period.' Bernard Byrne, who joined the bank in May 2010, initially as chief financial officer, would preside over a bank facing up to massive loan losses and booking a record €10.3 billion net loss that year. Bernard Byrne, former AIB chief executive. Photograph: Eric Luke 'The worst period was definitely 2010, trying to get close to the bottom of AIB's problems,' says Byrne. 'The deepening haircuts that it had to take on loans being transferred to Nama meant that any thought of the bank remaining mainly in private ownership evaporated.' It slunk into 99.6 per cent State ownership two days before Christmas – capping a tumultuous month that saw the State succumb to a €67.5 billion EU-International Monetary Fund (IMF) bailout. Litany of controversies Michael Somers, who launched the National Treasury Management Agency (NTMA) in 1990, was resistant when the then finance minister, Brian Lenihan, started badgering him to join the board of AIB as he prepared to retire at the end of 2009. He had his reasons. Somers had previously found himself in the trenches on AIB when Garret FitzGerald's government was forced to take over the bank's Insurance Corporation of Ireland subsidiary and bail out the bank after the insurer suffered large losses on high-risk insurance policies. Somers was deputy secretary general with the Department of the Finance at the time. 'The fear at the time was that international banks would pull credit lines from AIB and other Irish banks,' recalls Somers. He – as many others – would look on aghast as a litany of other skirmishes with controversy followed. Michael Somers, former chief executive of the National Treasury Management Agency and former vice-chairman of AIB. Photograph: Eric Luke AIB reached a €90 million settlement at the turn of the millennium with Revenue in relation to evasion of Deposit Interest Retention Tax in 2000. In 2002, the bank revealed that a rogue currency trader at its then Allfirst unit in the US, John Rusnak, had racked up a $691 million trading loss. In 2004, it was revealed that the bank had been overcharging customers on foreign exchange transactions for up to a decade, and two years' later, four former AIB executives reached a €206,000 tax settlement resulting from their involvement in a secret offshore investment company, called Faldor. Lenihan made a final effort in mid-November 2009 to change Somers's mind. 'He managed to get hold of me one evening at about a quarter to 12, after I'd gotten home from a nice dinner at the Dutch embassy. He said he needed to announce a number of positions the next morning and asked me again would I join AIB's board as deputy chairman,' he says. 'I relented.' Remedial work The outlook for AIB began to change when Duffy – an Irish banker who had spent his career overseas working for the likes of Goldman Sachs, ING and Standard Bank, leaving him untainted by goings on during the domestic property bubble – took charge in late 2011. By then, AIB was a shadow of its former self, having been forced to sell its 70 per cent stake in Poland's Bank Zachodni, a 24 per cent stake in Buffalo-based M&T Bank, and its holding in Goodbody Stockbrokers, as it raced to raise capital to fill a growing hole in its balance sheet from bad loans – and appease competition authorities in Brussels after receiving state aid. The bank had also inflicted €5 billion of losses on holders of its riskiest, subordinated bonds. 'It's easy to underestimate how much remedial work was done between 2010 and 2011 just to get to a place of some stability. But David coming in as CEO was hugely important,' says Byrne. 'The strength of his personality saw him take a huge amount of pressure off AIB – both politically and generally – and allowed people to work on what needed to be done to chart a way forward.' Return to profit Duffy's cost-cutting plan would involve the shuttering of 67 branches, salary cuts across layers of management, and the closure of the bank's legacy defined benefit pension scheme, where retirement benefits were linked to final salaries. It saw the bank return to profit in 2014, helped as a recovering economy allowed it to release some provisions previously set aside to cover bad loans. The bank also started moving at pace that year to resolve a mountain of bad debt on its balance sheet – which peaked at €31 billion, or more than a third of total loans in 2013. Irish banks also began that year, under pressure from regulators, to finally start to grasp the nettle on a mortgage arrears crisis that had been allowed to fester following the crash. Duffy – who was widely expected to lead AIB through an initial public offering (IPO) – quit unexpectedly in early 2015 to take over as CEO of Clydesdale and Yorkshire Bank in the UK, where he immediately enjoyed a basic salary double the €500,000 allowed at bailed-out AIB – and a generous bonus plan. Mark Bourke, former AIB chief financial officer. Photograph: Eric Luke It would fall to Byrne, Duffy's successor, and his chief financial officer Mark Bourke to get AIB ready for an IPO. Two years in the planning, Project Viking, as it was dubbed, culminated in June 2017 when Paschal Donohoe, only days into the job as Minister for Finance, pressed the button on a sale of a 28.8 per cent stake in the bank to stock market investors, raising €3.4 billion. 'US investors, particularly the big hedge funds, were all talking about the 'reflation trade' at the time,' recalled Bourke, referring to an investment strategy of piling into certain sectors that tend to perform well immediately after a recession. Irish gross domestic product (GDP) soared almost 8 per cent in 2017, making it the EU's fastest-growing economy for the fourth straight year, even if the figures were flattered by the State's large multinational sector. 'It was clear that markets were open and US funds, who were crucial to the ultimate success of the transaction, were prepared to invest in Europe again,' added Bourke, who is currently CEO of Portuguese lender Novo Banco, which French banking group BPCE agreed to buy last week. On the IPO roadshow, AIB teams held hundreds of meetings with potential investors over a number of weeks in Europe, North America and Asia. 'Because we spent so much time answering questions from international investors on the macro Irish story, it created something of a 'halo effect' for other Irish companies and the sovereign,' says Byrne. Contraction to growth Byrne used an Oireachtas finance committee appearance in December 2017 to urge the government to sell down more shares, as the stock was riding high. A global stock market slump in the second half of 2018 killed off any such ambition. The market appetite for Irish banks was dented further in quick succession by the threat of a hard Brexit; low demand for loans amid weak housing starts and cautious businesses; an ultra-low interest rates environment as Europe grappled with an era of subpar inflation, and the Covid-19 pandemic. 'The investor demand certainly was there after the IPO and there was an opportunity to move quickly to sell more shares,' Byrne says. 'There is always a risk of being caught out by unfavourable markets if you don't go when the stars are aligned.' AIB's return to full private ownership took longer than Byrne expected back in 2017. [ The Irish Times view on the State selling out of AIB: competition in banking is now the issue Opens in new window ] His successor, Colin Hunt, who took charge in March 2019, found the initial strategic plan that he and his CFO Donal Galvin had spent a year working on quickly made redundant as Covid-19 threw Ireland and much of the rest of the world into lockdown within weeks of it being unveiled. Loan payment breaks for businesses and households hit by the pandemic superseded loan growth for a period. But the bank has seen a surge in profits in recent years – with net income hitting a record €2.35 billion last year – driven by soaring interest rates as central bankers fought inflation triggered by effects of the pandemic and war in Ukraine. AIB and the other two remaining domestic banks, Bank of Ireland and PTSB, have also been helped as they carved up the loan books and deposit bases of Ulster Bank and KBC Bank Ireland – before the interest rates cycle turned. AIB has also bought back Goodbody Stockbrokers and pushed back into the life and pensions business – which it exited in 2012 as it put Ark Life into winddown – by setting up a joint venture with Irish Life's Canadian parent, Great-West Lifeco, in an effort to catch up with rival Bank of Ireland in the wealth and life insurance market. Colin Hunt, AIB's current chief executive. Photograph: Shane O'Neill/Coalesce AIB saw its loan book contract by almost 60 per cent to €58.4 billion between 2008 and 2021, amid loan sales, and households and businesses, scarred by the crash, repaying debt faster than taking on new loans. However, it has posted underlying loan book growth over the past three years, even after stripping out acquired Ulster loans, following a series of false dawns. A big driver has been green and transition lending, spanning everything from domestic mortgages on energy-efficient homes to an international climate capital business that specialises in lending to large scale renewable and infrastructure projects across Ireland, Britain, Europe and North America. Hunt was asked by one of the overseas investment bankers who beat a track to his office on his appointment six years ago what he'd like to be remembered for 10 or 15 years later. Apparently, he was shocked by the answer: decarbonisation. 'The investment banker was concerned this might appear off-piste if uttered in public. No one was talking about green finance at the time,' says a person familiar with the meeting. 'That's clearly changed in recent years.' AIB's international climate capital unit – where gross loans grew by 34 per cent last year to €5.5 billion – has provided another growth angle for a bank that remains a shadow of its boom-era self. 'Don't expect us to go out and buy another eastern European or US regional bank any time soon,' a senior executive says. Era of normalisation The last government resumed share sales in AIB in early 2022, when its stake stood at 71 per cent. AIB's financial results since the crash have routinely included a lot of what analysts call 'noise' from exceptional charges and gains. Crisis-era loan losses would be followed by a drip-feeding of provisions – which totalled more than €600 billion – to deal with the group's role in the industry-wide tracker mortgage scandal, including almost €97 million for a Central Bank of Ireland fine. More recently, the bank has taken large provisions for customer compensation on speculative noughties UK commercial property investments, known as Belfry funds, that failed, and costs associated with acquiring Ulster Bank loans. Exceptional charges fell by more than half last year to €66 million – heralding, what Hunt told analysts in March, was an era of 'normalisation'. 'We don't expect any material exceptional costs in this year. And I certainly don't want to find ourselves in a position where we have to incur more exceptional costs going forward,' he said at the time. While AIB is not on track to repay all of its bailout, the Government estimates that it is currently about €600 million above water on a combined €29.4 billion pumped into AIB, Bank of Ireland and PTSB – thanks to a €2 billion cash surplus recouped from Bank of Ireland. [ AIB to sell its 49.9% stake in merchant services joint venture Opens in new window ] 'In overall terms this has to be seen as a very positive outcome for the exchequer – and effectively delivers on the Government's commitment many years ago to recoup all the monies invested, which seemed a very unlikely outcome for a long time,' says John Cronin, founder of SeaPoint Insights, an independent research and analysis firm specialising in banking. 'That being said, equity investors in banks usually expect a return of more than 10 per cent per annum – so looking at it through a return on investment lens tells a different story.' A recovery has been made up of bank guarantee fees, interest on bailout bonds, and dividends. It ignores interest paid on money borrowed to save the banks, the 'opportunity cost' to the State's former pension reserve fund (part of which is now part of the Ireland Strategic Investment Fund) investing in ailing banks rather than putting cash to work elsewhere – or, indeed, what inflation has done to the time value of money. Carville insists that State's objective was always clear. 'We viewed the investments on a cash-in, cash-out basis,' he says. Not everyone agrees. 'If you went to a bank to borrow money and offered only to pay back the principal, you'd be laughed out of the place,' says former NTMA chief Somers. Societal scar If top executives were cheered by Donohoe's decision to lift the €500,000 pay cap at the bank on Tuesday after the sale of the remaining State shares, they were keeping it to themselves. Senior AIB officials were keen that there would be no form of celebration as the bank saw off the State as an investor, according to sources. 'We owe an immense debt of gratitude to the Irish taxpayer for the support during one of the bank's most challenging times,' Hunt wrote in an email to employees that morning. Staff leaving the group's Molesworth Street headquarters that evening could not have missed a ruckus down the road as hundreds protested outside the Dáil about the housing crisis – providing a reminder of the deepest societal scar left by the banking crash.