State to sell 5% of its stake in AIB, bringing share to 25.5%

THE STATE IS set to sell a 5% of its stake in AIB, bringing its share in the bank to 25.5%.

The sale of shares was done through an accelerated bookbuilding process with institutional investors.

This is a process in which shares can be offered and sold in a short period of time, with little to no marketing or promotion.

If successful, the sale will generate €593 million for the Exchequer, according to a statement from newly appointed Minister for Finance Jack Chambers.

Upon settlement, this sum will be returned to the Ireland Strategic Investment Fund.

Around €1.45 billion has been raised from the AIB trading plan since it came into effect in January 2022.

Minister Chambers added that he expected the AIB share trading plan managed by Merrill Lynch International to be further extended to 23 January, 2025.

File image of Minister for Finance Jack Chambers

Chambers intends to sell no more than 15% of the AIB stake over the duration of this trading plan, and added that there is a provision that shares may not be sold below a certain price which the Department deems to be best value for the taxpayer.

The Finance Minister noted that this is the fifth disposal of shares in AIB and that each one has “achieved incremental improvements on the placing price”.

“This latest transaction achieved a price which was 24.7% higher than what was achieved in the previous transaction last November,” said Chambers.

He added that upon settlement, the lastest transaction will bring €16.1 billion the total amount returned to the State to date from its investment in AIB.

Chambers further remarked that there was a “significant demand from a large number of high quality international institutional investors” with the transaction.

Chambers said he wants to “continue to normalise the relationship between the State and AIB” and that it is the Government’s belief that “banking in the main is an activity that should be provided by the private sector”.

AIB was among a number of banks rescued through state intervention when the Irish banking sector faced a financial abyss at the time of the global financial crisis in 2008.

An initial 71% holding in AIB was built up after the state rescued the bank following the 2008 financial crisis.

Towards the end of 2021, then-finance minister Paschal Donohoe said most of the shares will be sold over a number of disposals.