AIB set to pay €4bn off bailout – Noonan
AIB will repay about €4bn of its €21bn bailout to taxpayers over the coming year, Finance Minister Michael Noonan has said.
The State-owned lender got the green light from Europe to repay €1.7bn between now and Christmas, with the rest expected over the course of next year.
Mr Noonan said all the money would be used to pay down debt. "My expectation is that between now and this time next year, the taxpayer will have about €4bn of the money that was invested in AIB by the taxpayer repaid to the taxpayer," the minister said.
AIB will repay part of the State's €3.5bn of preference shares, a type of loan, with the rest converted to equity, AIB said yesterday morning. The payment will be partly funded by AIB issuing junior bonds.
AIB chief executive Bernard Byrne said the move marks a milestone in the transformation of AIB.
"The capital reorgansation will support a sustainable and compliant regulatory capital structure underpinning our business plans and positions the Group to repay capital to the State and return to private ownership over time," he said.
Any money recouped for the Exchequer is already earmarked for use in reducing the national debt, which stood at more than €200bn at the end of last year, including rescue loans owed to the European bailout funds.