The State has reduced its stake in Bank of Ireland to below 12 per cent after continuing to drip-feed stock into the market over the past month.
The Ireland Strategic Investment Fund (ISIF), which holds the stake on behalf of the Minister for Finance, dipped below the notifiable threshold on Friday, to 11.97 per cent, according to a stock exchange disclosure issued on Tuesday.
Minister for Finance Paschal Donohoe announced on June 23rd that he was planning, by year end, to have sold a large part of the Government's then 13.9 per cent stake, a legacy of the bank's crisis-era bailout.
While he has refused to be drawn on the minimum price he was willing to accept for the shares, the bank’s stock had been changing hands at just under €4.50 before the June announcement but has been trading above €5 over the past four weeks.
Bank of Ireland received a €4.7 billion bailout between 2009 and 2011 and had returned about €5.9 billion to the State by the end of June, making it the only Irish lender to date to repay its aid bill.
AIB buy-back
The recovery includes money received from the sale of bank stock, preference shares and bailout bonds following the crisis. It also includes dividends and the collection of guarantee fees.
If ISIF continues to sell shares at the same pace as the past two months, the Government’s holding could fall below the 8 per cent threshold by the end of the year.
Separately, State-controlled AIB secured approval at the bank’s annual general meeting in April to allow it to buy back up to a 4.99 per cent stake in the lender from taxpayers over 12 months, as it seeks to accelerate its privatisation.
The Government continues to own 71 per cent of the bank as a legacy of its crisis-era bailout.
The Iseq Financial index, mainly comprising AIB, Bank of Ireland and Permanent TSB, has risen almost 55 per cent so far this year, fuelled by a recovering economy from the Covid-19 shock and planned carve-up among the trio of the loan books of rivals KBC Bank Ireland and Ulster Bank as they exit the market.
