The Department of Finance is set to sell approximately 5% of AIB’s stock, generating around €500 million for the taxpayer. This move will reduce the State’s overall ownership in AIB Group from approximately 51.9% to about 46.9%. It is a significant milestone in the bank’s and the government’s journey towards privatization, following the nationalization of AIB in 2011 due to significant losses from bad loans during the Celtic Tiger era.
The sale, which is exclusive to institutional investors, is taking place through an accelerated book building process and the results will be announced the next morning. While the exact price of the transaction is unknown, AIB shares closed at €3.82 in Dublin, giving the bank a market capitalization of over €10 billion.
This placement follows a directed buyback of €215 million of State shares by the bank in April and runs alongside the Department of Finance’s trading plan to sell approximately 1% of AIB shares per month. The trading plan, which began in January 2022 and has already raised €698 million, has been extended twice for six-month periods. AIB CEO Colin Hunt embarked on a marketing road trip in March after three and a half years to inform potential investors about the bank’s impressive performance.
AIB’s total income increased by 21% in 2022 to nearly €2.9 billion due to higher interest rates driving revenue. AIB has attracted interest from institutions interested in acquiring stakes in the bank or increasing their existing holdings. However, buying shares has been limited due to the government’s majority position.
This recent transaction will help meet the demand as approximately 10% of the bank’s stock has been made available this year alone. Additionally, the Minister for Finance Michael McGrath has announced an extension of the drip-feed trading plan until the end of the year. If this plan is completed, the State’s ownership will decrease to just above 40% by the end of 2023.
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