As the Deputy is aware, I have recently awarded a contract to Goldman Sachs International, a U.K. subsidiary of the Goldman Sachs group, to provide financial advice to the Department of Finance in relation to capital restructuring actions (and related matters) with respect to the State's investments in AIB. The purpose of awarding the contract is to engage a firm with the appropriate experience to provide advice to assist the Department in making the bank's balance sheet fit for purpose and in designing a roadmap that will see the bank start to return cash to the State. As I have indicated previously, no decision has been taken in relation to the State exiting any of its investments in the bank.
The award follows the establishment by the Department last year of three separate panels of financial advisers after an extensive process that followed EU procurement rules. These panels were put in place to principally facilitate the provision of timely advice in relation to our banking investments though the panels are available for the wider Department to use in other areas if deemed necessary.
The award of the current contract followed a competitive tendering process with each of the eleven firms on Panel 1 (which covers capital markets, strategic, M&A and restructuring advice) being invited to submit a tender. Prior to the year end, each of the firms accepted the invitation and the tendering process included face-to-face presentations by each of the firms to a panel of Department of Finance officials. Arising from these presentations, each of the firms was scored across a number of standard criteria with Goldman Sachs International being adjudged to have achieved the highest aggregated score. Accordingly, they were awarded the contract.
As part of the process for assessing the award of a contract by the Department, all firms who are invited to submit a tender are required to provide a declaration that no conflicts of interest exist. Should a firm be in a position to be unable to provide such a declaration, any tender submitted by the firm would be disqualified from further consideration. I can confirm that Goldman Sachs International provided the Department with the appropriate declaration.
As part of the terms of the contract, Goldman Sachs International has been engaged on a pro bono basis. This is a good outcome for the State and we understand is not unusual internationally, given firms' desire to be associated with such high visibility government work. In fact a number of the tenderers offered their services on a pro bono basis.
Finally, the Deputy will be aware that Goldman Sachs is one of the leading investment banks worldwide with vast experience in a number of areas, including corporate finance. The firm has ongoing engagements with a wide variety of clients including large corporates and sovereign states. The Federal Reserve Board is the primary regulator of the Goldman Sachs group. In addition to this, Goldman Sachs International is regulated by the PRA and FCA in the U.K. With its vast experience and high degree of regulation, I am not aware of any reason not to proceed with their engagement, be it probity or otherwise.
