Wednesday 20 September 2017

Get out of AIB while the going is good

Stock image: Bloomberg
Stock image: Bloomberg

Donal O'Donovan Business Editor

Fine Gael took its eye off the ball this month and by missing a Dáil vote allowed the AIB share sale to become a political football that Labour and Sinn Féin are happily booting around.

To keep the €3bn deal on track the Government needs to regain control of the narrative and the momentum. Moving ahead with tangible action this week to activate the sale is the best way to do that.

Its not healthy for the Government to own a bank it regulates.

Conditions in the markets could hardly be better. They may well worsen in future.

This is not an ideal scenario. The share sale being put in train will not recover all of the cash sunk into AIB seven years ago.

That money was a rescue whose merits will be debated for decades, not a true investment. The option of making a full financial recovery out of AIB right now isn't on the table.

In its absence, reducing the State's unwanted stake gradually and using the funds to repay the vast loans used to bail-out the bank makes sense. It brings in cash and also starts to normalise relations between the State and its biggest lender.

Irish Independent

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