State reduces AIB stake to 25.5pc

The disposal was done by way of a placing in an accelerated book building process to institutional investors.

The deal saw the Department of Finance dispose of approximately 5pc of the issued ordinary capital of AIB at a price of €4.90 a share.

Minister for Finance Jack Chambers said today that the gross proceeds from the sale will be €593m, with this price 24.7pc higher than the previous transaction last November.

Around €16.1bn has been returned to the State from its investment in AIB to date, Mr Chambers added.

The Government has been gradually reducing its ownership in the bank in recent years. It was forced to nationalise AIB in 2011 due to huge losses resulting from bad loans during the Celtic Tiger.

When the deal is settled, this will be returned to the Ireland Strategic Investment Fund.

The minister has also undertaken not to sell further shares in the company for 90 days.

Mr Chambers said that the transaction was well received, with strong demand recorded from a large number of “high quality international institutional investors.”

“We continue to make significant progress in reducing the State’s shareholding in AIB and this is evident in this shareholding reducing from c. 71pc at the beginning of 2022 to c. 25.5pc today meaning the free float in AIB has now increased to 74.4pc which will be important for the attractiveness of the bank to institutional investors,” he said.

Mr Chambers added that the Government wants to continue to normalise the relationship between the State and the bank.

“It remains this Government’s belief that banking in the main is an activity that should be provided by the private sector,” he said.

AIB chief executive Colin Hunt said the bank welcomed the transaction.

“This well-supported transaction is another important milestone in the normalisation of the share register and will yield a further c. €593m for the Irish taxpayer to whom AIB owes an immense debt of gratitude for its support during the financial crisis, he said.