DAIL DEBATES


ICC BANK BILL 2000 ORDER FOR SECOND STAGE

Sitting Time
Sitting Date
12:30
9 November 2000

Mr. Kelleher: I welcome the opportunity to speak about ICC Bank. In
assessing the success of ICC Bank, it is important to look not just at the bank itself but at its contribution to the development of Ireland in the 1970s and 1980s, particularly in relation to small and medium-sized business. The traditional banks were very conservative in their approach to providing venture and seed capital to small and medium-sized business breaking into areas of industry that were heretofore new to this country, particularly telecommunications, software and other forms of e-commerce. ICC Bank's contribution to developing that type of market has been beneficial to the economy at large.
Last year the Bank of Ireland expressed an interest in purchasing ICC Bank. It carried out a due diligence exercise but later indicated that it would not be proceeding. From the outside that might have looked as if there was a problem with ICC. I believe, however, that the problem was within the financial sector. Financial stocks had dropped. New banks were entering the Irish market. The opening up of the market and the entry of the Bank of Scotland meant competition. That was new to the Irish banking scene. Rather than there being a problem with ICC Bank, there was a problem with the traditional banks who were unsure where they were going and how they could address the more competitive market that heretofore had not existed in our economy.
I have always been concerned that lack of competition among lending
institutions has stymied the development of our economy. We have two
large banks - AIB and Bank of Ireland. These have not been proactive
enough. They have not been brave enough in embracing new types of
development or in providing capital to small and medium-sized companies entering unknown territory. But for ICC Bank, many very successful companies, innovative and very profitable companies that grew to be publicly quoted companies, would not have developed.
ICC Bank should be sold off to grow and develop. At the very least, it needs a partner, because of the competitive nature of and changes within the whole banking sector here. It has proved itself a success. It is well managed by the board, the management and the staff, which comprise a very dedicated group of people. The level of expertise it possesses would be of great benefit to any larger institution that wishes to purchase ICC Bank.
If ICC Bank is to be sold, there are one or two things I would like to see encompassed in any agreement. For example, in the event of a downturn in the economy or of the Government having to bring forward a scheme along the lines of the interest subsidy loan or a venture capital scheme, or in the event of a further take-off in the economy resulting in small and medium-sized businesses having difficulty getting access to funding, there should be some mechanism in place whereby the apparatus that is ICC Bank could still be used for such schemes after it has been taken over by another institution. It is something that might never arise. However, it would not cost anything to ensure the goodwill of whoever purchases this
bank in giving a guarantee that if ever the Government required its
services in bringing forward a scheme to encourage further growth and
development of small and medium-sized businesses they would be, at the very least, co-operative. I would be concerned if that was not part of any sale, and it would not affect the price we hope to achieve for the bank.
The fact that ICC Bank was not sold last year was due more to the
downturn in financial stocks and the concerns of the larger financial
institutions than to problems within ICC Bank. The Minister has in the interim included in this Bill a provision for an increase of share capital from £40-£80 million. This gives the bank scope and opportunity because, over the last five or six years, it has achieved remarkable success, even against a backdrop of uncertainty. There has been talk for some time of selling off some of the family jewels and it was intended from an early stage that ICC Bank was one of the institutions that would be sold off.
From that point of view, it has done remarkably well against that backdrop of uncertainty. Its profits and the increase in its capital assets is an indication of that. It is an indication also of the excellence of its staff and the expertise it has built up over many years. Deputy Kitt referred to the fact that the bank opened up branches in Waterford, Galway and Belfast in that interim period. This shows that there was confidence in the bank. Anybody looking to purchase ICC Bank would have to acknowledge that even against a backdrop of uncertainty it was able to perform.
There is one thing the Minister might clarify. Given that ICC Bank is a publicly quoted company, has there ever been any trading on the market of ICC Bank stock. If not, why? It baffles me that if ICC Bank is a publicly quoted company there would never have been trade in ICC stocks.
This Bill is preparing ICC Bank for sale. I certainly hope prospective purchasers know how much it is worth. I would be concerned if only one bidder conducted a due diligence exercise and subsequently did not offer what we would consider a fair price for ICC Bank. It is important that ICC Bank should be marketed well and its strong points highlighted at every opportunity. Members of this House have an opportunity to do likewise today and point out how great a benefit is the wealth of expertise that has been built up in ICC Bank. In buying this bank, a buyer is not just buying bricks and mortar but a wealth of expertise in areas that other banks are only now realising. In the dark old days of the 1970s, 1980s and even the early 1990s, ICC Bank was at the cutting edge, looking at innovative companies and new forms of development.
Reference was made earlier to wind energy. ICC Bank was looking at this as an opportunity. In the 1980s it was looking at software and
e-commerce. It has always been to the fore. If that were to be lost, I would regret that very much. I hope that whoever purchases this bank will allow it a certain amount of autonomy to continue in a focused manner what it is best at, that is, providing capital to small and medium-sized business and start-up business where it sees potential that other banks and lending institutions frequently fail to recognise.

Section to follow:
Section O follows.

Sitting Time
Sitting Date
12:40
9 November 2000
Text:
Mr. Kelleher continuing
As I said on a Second Stage debate in 1999, I would have a difficulty in selling a State owned bank to a company that does not have a tax clearance certificate. That is an important marker to put down. A publican when renewing his licence must have a tax clearance certificate.
We must ensure that requirement is rigidly enforced when selling any State asset. The people own this bank. With regard to people who renage on their duties or are not co-operative in paying their fair share of tax, they should first and foremost have a tax clearance certificate from the Revenue. An inquiry has been held and most of the banks have settled with the Revenue. If any bank is interested in purchasing the ICC, even if it is offering top dollar, as a point of principle, we should not negotiate until such time as it has made a full and final settlement with the Revenue Commissioners.
I thank the staff of ICC, the management and the board for many years of excellent service they have provided and the contribution they have made to creating the Celtic tiger, particularly in the areas of e-commerce, software and many of the innovative developments for which Ireland is now renowned. We owe a great deal of gratitude to the management, board and the staff of the ICC for their years of service. I hope their share option scheme will go well and that the staff will become wealthy from the sale of the bank.