The finance minister and AIB CEO have declared that reducing the state's stake in the bank to zero following a successful share sale is a “significant milestone”.
Pascal Donohoe said the state had sold its 2.06% stake in AIB at €6.94 per share, which would bring in around €305.3 million once the deal was completed, meaning the total amount returned to the state from its investment in AIB was around €19.8 billion.
“This is an important milestone in the implementation of the government’s policy of returning the banking sector to private hands,” he noted.
“When I announced the launch of the equity trading plan in December 2021, I emphasized that banking involves taking credit risk and therefore should be carried out by the private sector.”
Donohoe added that this meant that taxpayer funds used to bail out Irish banks “should be returned and put to more productive uses”.
“The gradual reduction of public investment in AIB in a growing market has proven successful in achieving this goal for our citizens.
“Overall, based on current market prices, the state is approximately €0.6 billion above the breakeven point on its €29.4 billion investment in AIB, Bank of Ireland and PTSB.
“The state also holds warrants in AIB that were issued shortly after the bank’s IPO in 2017. Treasury officials are exploring options in this regard, including buying back these AIB warrants from the state.”
“Deep regret”
AIB Group chief executive Colin Hunt said AIB “deeply regrets” the institution had to be rescued by the state almost two decades ago and “owes a great debt to Irish taxpayers for the support provided during that difficult period”.
“Since then, we have focused on restoring trust, paying down our debts to the government and continuing to support our customers, communities and the broader economy.
“The Group has undergone significant change and, through the implementation of our proven strategy, we are well positioned to continue to create value for all our stakeholders in the medium term.
“With our market-leading customer base, stable revenues and strong capital, we are confident in the strong fundamentals of our business and our ability to play a positive role in the Irish economy, helping to build a more sustainable future for our customers and delivering sustainable returns for our shareholders.”
“AIB continues to negotiate with the Treasury regarding the possible redemption of warrants issued to the Minister during AIB's IPO in 2017. If the transaction is completed, the warrants will be cancelled and the funds will be returned to the state.”
Sourse: breakingnews.ie
