AIB welcomes Government’s sale of further shares for €396.6m

AIB has welcomed Minster for Finance Paschal Donohoe’s sale of a further 5 per cent stake in the bank on the market, in a move that raised €396.6 million.

The placing of 134 million shares at €2.96 each with institutional stock market investors on Monday evening, by way of a so-called accelerated bookbuild, has reduced the State’s stake in the bank to about 57 per cent.

“It is another important development in the process of returning the State’s investment in the group and a normalisation of the share register,” said AIB chief executive Colin Hunt. “AIB owes the Irish taxpayer an immense debt of gratitude for its support during the financial crisis. We remain focused on our strategy to grow and strengthen the group to ensure we continue generating sustainable returns for all our shareholders.”

Following the placing AIB will have returned about €11.5 billon of cash to the government since its €20.7 billion crisis-era bailout. Taxpayers’ remaining holding in the bank is worth about €4.75 billion – meaning the State remains about €4.45 billion under water on the amount it pumped into the bank to keep it from imploding during the financial crisis.

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This is the second 5 per cent stake placing that Mr Donohoe has carried out this year in AIB and comes in addition to regular drip-feeding of small amounts of shares in the bank on to the market. The holding stood at 71 per cent at the start of 2022.

The Minister said the latest deal was “well received by a large number of international institutional investors”.

“As I have previously stated, this Government believes that banking is an activity that should in the main be provided by the private sector and that taxpayer funds which were used to rescue the banks should be recovered and used for more productive purposes,” he said. “We continue to make progress in achieving this goal.”

The Minister has agreed not to sell another large block of shares for at least three months. However, he will be able to start selling small amounts of stock again after two months.

John Cronin, an analyst with Goodbody Stockbrokers, which is part of AIB, said that it is possible that the State’s holding could fall below 50 per cent “in the relative near-term, which would be a landmark moment”.

Shares in AIB were trading 1.5 per cent lower at €3.07 in midafternoon trading in Dublin on Tuesday, but were changing hands above the €2.96 price of the placing.