Business Irish

Friday 15 December 2017

AIB set for stock market flotation by June - Noonan

Luis de Guindos, Spain's finance ministe with Michael Noonan
Luis de Guindos, Spain's finance ministe with Michael Noonan

Colm Kelpie and Sarah Collins

A STOCK market flotation of AIB could take place within months.

Finance Minister Michael Noonan has said a sale of 25pc of the state owned lender could take place as early as May or June.

The Government owns more than 99pc of AIB since it pumped around €21bn into the bank to save it from collapse after the financial crisis.

Mr Noonan had held off on firing the starting gun on an AIB listing for more than a year, citing market conditions. London-based Rothschild has already been hired to monitor market conditions for the State.

"All the banks are trading profitably and we're set to organise an IPO, probably in May or June, for AIB, to sell around 25pc of it," Mr Noonan told reporters in Brussels.

The move is a concrete step in what has been a long delayed move to reduce the State's holding in AIB.

There is no realistic prospect of recouping all of those bailout costs in the short term.

The State holding in the bank was valued at €12.2bn at the end of June.

The Government plans to sell a 25pc stake in the bank to institutional investors, and to use the proceeds to reduce the national debt.

Based on the most recent valuation the sale would raise €3.3bn, however, the price is likely to have declined since then, in line with nearest peer Bank of Ireland and other European banks, notably including Deutsche Bank, which have seen their shares come under pressure over fears lenders are struggling to make profits as long as official interest rates remain at historic lows.

Mr Noonan has insisted the full bailout cost will be recovered over time.

Earlier this month, Goodbody stockbrokers said the State-owned bank would likely pay a €285 million dividend in the coming months. The bank has returned €1.8bn to the State, of debt issued as part of the bailout, and a dividend.

The minister has long committed to selling all State holdings in rescued banks over time. As well as almost all of AIB, taxpayers remain the biggest shareholders in Bank of Ireland and Permanent TSB, all as a result of crash-era rescues.

Last November the Department of Finance said that it had commenced a competition to appoint investment banks as "global coordinators" to act as part of a banking syndicate of advisors to manage the sale of shares in the bank.

Irish Independent

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