Business Irish

Tuesday 25 April 2017

AIB tipped to pay €285m dividend to the State - its first since the crash

Finance Minister Michael Noonan
Finance Minister Michael Noonan
Donal O'Donovan

Donal O'Donovan

AIB is tipped to pay a €285m dividend within months, its first since the crash. Almost all of the money will go to the State.

The money is in addition to an anticipated €3bn the State will raise by reducing its stake in the bank from more than 99.9pc through a stock market flotation.

The State holding means there would be little of any dividend left to share among AIBs' tens of thousands of other shareholders.

The Minister for Finance Michael Noonan told the Dáil on Tuesday that there are "two windows" this year to move ahead with the already long delayed AIB share sale - either in May / June or in the autumn.

The final decision on the timing had not yet been made, he said.

The minister said AIB would need to publish its financial results for 2016 - due in March, and announce a "prudent dividend", before the share sale,

Goodbody Stockbrokers analysts Eamonn Hughes said a dividend would make AIB more attractive to investors.

"Our estimates incorporate a circa €285 million ordinary dividend from AIB for full year 2016, which would likely supplement its potential income credentials," he said.

AIB was valued at €12.2bn at the end of 2015, but that may well have slipped, in line with the wider market.

It is well below the €21bn cost of bailing out the lender.

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