The value of the State's shareholdings in AIB and Bank of Ireland fell by €1.3 billion last year.

According to the latest quarterly report from the Ireland Strategic Investment Fund AIB was worth €11.3 billion at the end of 2016 compared to €12.2 billion a year earlier.

The value of the ISIF's 14% stake in Bank of Ireland also fell, from €1.5 billion to €1.1 billion.

EU bank shares had a torrid 2016. Fears over the fallout from the legacy bad debts in the Italian banking system and massive penalties for German lender Deutsche Bank related to its conduct prior to the financial crisis were among the issues to dog the sector.

AIB was one of the worst performing institutions in the most recent stress tests by the European Banking Authority.

The ISIF also has a discretionary portfolio of investments, which it inherited from its predecessor the National Pension Reserve Fund.

The €8.1 billion portfolio is being sold down gradually to meet the ISIF's mandate of directing funds towards investments in Ireland that support economic activity and employment here.

The discretionary portfolio rose by 2.9% in value to €8.1 billion last year.

The Irish portfolio represents €2.7 billion of that total and includes investments in infrastructure projects, small and medium enterprises, and €502m worth of Irish real estate.