Taxpayers have recouped €558m this week from the cost of the bank bailouts just over a decade ago, with cash from a sale of AIB shares and recovered funds from Nama,
A €250m payment from Nama on Tuesday takes the total recouped from the bad bank to €3.25bn. A further €250m is due to be transferred to the Exchequer later this year with another €1bn due after that. Nama has repaid its initial start-up costs including debts owed to the banks for loans originally transferred into the agency and excess cash it now generates beyond its own running costs is being repaid to the State as it is wound down.
Nama ended the last financial year with €750m in cash or cash equivalents after generating €670m from asset sales and non-disposal income.
The agency has generated €47bn in cash over its lifetime and has just €700m of loan and property assets left on its books.
Nama will be wound down over the next three years by selling its residual portfolio, funding residential property development and managing strategic development sites.
Meanwhile, the Government continues to reduce taxpayers’ stake in the bailed out banks. On Tuesday, Finance Minister, Paschal Donohoe said that the State’s stake in AIB had been cut to 63.5pc after a sale of around 5pc of the bank.
The disposal of the stake, which was announced by the minister on Monday, cut the Government’s shareholding from 68.5pc.
The sale of around 133.6 million shares raised €308.4m, with shares priced at €2.28 each.
The shares were sold in a placing to institutional investors, a faster method of disposing of the Government’s stake than drip-feeding shares onto the market.
The proceeds from the sale will be now returned by the Ireland Strategic Investment Fund, which holds bank shares on behalf of the State, to the Exchequer.
The Government committed to not sell any further shares in AIB for a period of 90 days following the completion of the placing.
AIB chief executive Colin Hunt said the disposal of the 5pc shareholding was “an important development in the process of returning the State’s investment in the group and a normalisation of the share register”.
Taxpayers have now recouped around half of the €20.8bn cost of bailing out AIB more than a decade ago.
Last week, Mr Donohoe extended the AIB share trading plan until January 24 next year. It had been expected to end no later than July 10.
Funds raised from the block sale of shares are in addition to a deal in May when the Government accepted a buy back offer from AIB to acquire €91m of taxpayer-owned shares. As the bank’s largest shareholder, the State was the major cash beneficiary from that deal which saw the bank use part of its own profits to cancel shares. Government is also in line for the lion’s share of a proposed €122m cash dividend this year.
The Government’s stake in Bank of Ireland has also been cut to just under 3pc over the past year from 13.9pc, raising well over €530m. Unlike the AIB block sale, the Bank of Ireland stake has been cut through on ongoing but smaller share sales over the stock market.