'Important milestone': State’s shareholding in AIB reduces to zero
Eva Osborne
Both the Minister for Finance and the chief executive of AIB have said it is an "important milestone" that the State’s shareholding in the bank has reduced to zero following further successful share disposal.
Paschal Donohoe said the State sold a 2.06 percent stake in AIB at €6.94 per share, which will generate around €305.3 million upon settlement, meaning the total amount returned to the State to date from its investment in AIB to around €19.8 billion.
"This is an important milestone in delivering on the government’s policy of returning the banking sector to private ownership," he said.
"When I announced the launch of the share trading plan in December 2021, I commented that banking is an activity that involves taking credit risk and therefore should be provided by the private sector."
Donohoe said it follows that taxpayer funds which were used to rescue the Irish banks "should be recovered and used for more productive purposes".
"The gradual disposal of the State’s investment in AIB into a rising market has been successful in delivering on this objective for our citizens.
"On an overall basis, based off current market prices, the State is c. €0.6 billion above break-even on its €29.4 billion investment in AIB, Bank of Ireland and PTSB.
"The State also holds warrants in AIB which were issued shortly after the IPO of the bank in 2017. Department of Finance officials are considering options in this regard, including AIB purchasing these warrants back from the State.”
'Profound regret'
AIB Group chief executive, Colin Hunt, said AIB "profoundly regrets" that the institution had to be rescued by the State almost two decades ago and "owes an immense debt of gratitude to Irish taxpayers for the support provided during that challenging time".
"Since then, our focus has been on rebuilding trust, repaying the State and continuing to support our customers, communities and the wider economy.
"The Group has undergone significant transformation and through the implementation of our proven strategy, we are well-positioned to continue generating value for all our stakeholders over the medium-term.
"With our market-leading customer franchise, resilient revenues and a strong capital position, we remain 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 while delivering sustainable returns for our shareholders.”
"AIB remains in discussion with the Department of Finance regarding the potential purchase of warrants issued to the Minister at the time of AIB’s IPO in 2017, which, if transacted, would result in the cancellation of the warrants and additional funds being returned to the State."
