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Thursday 2 October 2014

Bank sell-off: Q & A

Published 04/09/2014 | 02:30

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Pictured are AIB CEO David Duffy and CFO Mark Bourke speaking at the announcement of their results for the half year this July
Pictured are AIB CEO David Duffy and CFO Mark Bourke speaking at the announcement of their results for the half year this July

Q: Why would we want to sell AIB? Can we not just keep it as a state-owned bank?

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A: The state pumped €20bn into bailing out AIB and EBS. That was taxpayer's money and it was always the plan to try and claw whatever we could back.

It had been hoped that Europe might help to pay some of that crippling cost.

Finance Minister Michael Noonan has said he's come to the conclusion that the state would get more if it sold its stake privately.

Q: How much might the state get for it?

A: The state has valued its 99.8pc stake at about €11bn. But that's expected to rise. And the bank posted a better than expected profit in the first half of the year, which will help make it more valuable.

Q: What form would a sale take and when should it be done?

A: Mr Noonan has said he doesn't expect to fully privatise AIB before the next election in two years' time.

Experts have said selling it over a period of years, in more buoyant market conditions and when the franchise is stronger, would be the likely option.

It's not yet clear what form a sale could take.

Earlier this year Mr Noonan revealed that the Government rejected a €500m approach to buy a stake in AIB from a Gulf-based wealth fund.

Mr Noonan said the Government was not interested at the time.

The bank may likely be re-floated on the stock exchange. A sale to a larger foreign bank could also be a possibility.

Q: Are there plans to sell Bank of Ireland?

A: Mr Noonan has said that the State's remaining 14pc shareholding in Bank of Ireland is valued at about €1.2bn.

But he said there are no plans a t this stage to sell the stake.

In June it was announced that US billionaire Wilbur Ross was to put his entire remaining stake in Bank of Ireland up for sale. Mr Noonan said the sale by Mr Ross of his remaining 1.8 billion of shares demonstrated a "continued very strong interest in Irish assets".

Irish Independent

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