The Irish government plans to sell its remaining shares in Allied Irish Banks (AIB), which it bailed out during the financial crisis.
Finance Minister Paschal Donohoe announced the intention to divest the State’s remaining direct shareholding in AIB through an accelerated bookbuild (ABB) transaction.
“This ABB transaction represents our seventh such disposal in AIB and will reduce the State’s directed shareholding in the bank to zero. This is an important milestone in delivering on the government’s policy of returning the banking sector to private ownership,” he stated.
Last month, AIB shareholders approved the repurchase of €1.2 billion worth of shares from the State, reducing the government’s stake to 3%, which will now be completely sold off.
During the financial crisis, the State invested approximately €21 billion in AIB as part of its bailout efforts. Taxpayers also contributed billions to Bank of Ireland and Irish Permanent, as well as covering the costs associated with the collapses of Anglo Irish Bank and Irish Nationwide.
The completion of this share sale will mark a significant conclusion to the financial crisis era. The government sold its final remaining small shareholding in Bank of Ireland in 2022. It continues to hold a 57% stake in Permanent TSB (PTSB).
The sale of shares, combined with annual dividends of around €100 million, will result in approximately €19.7 billion being returned to taxpayers. Minister Donohoe indicated that the State is approximately €300 million above break-even on its total investment of €29.4 billion in AIB, Bank of Ireland, and PTSB.
In March, AIB reported a record annual profit of €2.35 billion for 2024, benefiting from the surge in European Central Bank interest rates while facing limited domestic competition to offer attractive deposit rates.
The Irish banking sector has seen reduced competition in recent years due to the departures of Ulster Bank and KBC Bank Ireland. Earlier this year, AIB CEO Colin Hunt stated that the bank was on a “clear path to return to full private ownership this year.”
AIB’s share price has performed strongly recently, rising 1.08% today to close at €7.01.
Once fully privatized, AIB is likely to be freed from the €500,000 government-imposed salary cap introduced in 2009. The bank has sought the removal of the cap as State ownership diminished, but the government had previously resisted.
