Wednesday 18 October 2017

Prospectus reveals AIB restructure cost lender €10m

Stock image
Stock image

Gretchen Friemann

AIB's new holding company has cost the partially nationalised lender €10m according to a corporate structure prospectus.

The document was released yesterday and included a trading update that reiterated the recently floated bank remains on track to conclude an €870m investment programme by the end of the year.

The bank also said its net interest margin - a key profit measure - "continues to benefit from stable asset yields and lower funding costs".

AIB has been forced to fund the formation of a new holdco which requires the publication of a fresh prospectus just months after the bank completed a similar exercise in June when it returned to the London and Dublin stock exchanges in a €3.4bn initial public offering.

The float reduced the Government's stake in the bank to just over 71pc.

Shareholders will vote on the corporate restructure on November 3. Once the courts sanction the change, post the EGM, shares in the existing structure will be withdrawn from trading on December 8 and the new holdco will commence trading on December 11.

Not that shareholders will notice much of a difference. The value of the shares will not change since the restructure is solely designed to accommodate Europe's incoming MREL requirements, which aim to shield taxpayers from another banking collapse.

While the prospectus - virtually identical to the June IPO document - updated the possible geopolitical risks facing AIB, it presented no update on the pace of reduction of its €12.1bn in non-performing exposures.

The bank reiterated that, as of last year, momentum in the treatment of soured loans has slowed as it grapples with the rump end of the portfolio.

Irish Independent

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