Michael Noonan eyes dates for AIB shares sale

Michael Noonan appears to have ruled out selling down an initial stake in AIB to stock markets until after the election.

The Finance Minister indicated that he now views that any initial public offering in shares in the nationalised bank would take place next spring or by early summer 2016 at the earliest.

Talking to the media at a presentation of the National Treasury Management Agency, Mr Noonan reiterated that the preparations for the sale of AIB would not be influenced by what he described as the “political calendar.” A window to sell a stake would be as early as autumn, but he said a sale at that time may possibly interrupt preparations for the Budget in October.

Both the minister and NTMA chief executive Conor O’Kelly would not be drawn on what they thought AIB would be currently worth.

Mr Noonan said that the market would likely be guided by AIB’s interim results in early August to assess a potential valuation for the bank.

AIB was last valued officially on the Government’s books at the end of last year, at a total of around €11.7bn. That valuation includes €4.5bn in preference shares that the State injected into the bank at the height of the financial crisis.

Mr O’Kelly said it was clear that valuations for bank stocks had improved, as reflected in their corporate ratings.

Mr Noonan said that the Government continues to hold a stake of just over 14% in Bank of Ireland. Its policy for the moment was to hold that stake, he said.

David Holohan, head of research at Merrion Capital, told the Irish Examiner that there was a keen appetite for European financial stocks, including for those in so-called periphery countries such as Italy.

Mr Holohan said he did not think that any plans the Irish Government may have to sell down its banking stakes would clash with those of the British government to sell down its state-owned banking assets.

He said that investors viewed the two countries as following different economic “recovery cycles”, and banking assets would therefore be attractive to investors.

Earlier this week, Standard & Poor’s raised its ratings on Irish banks, saying that the outlook for Ireland’s banking industry was now stable after emerging from the financial crisis.

It raised its ratings on AIB, Bank of Ireland and Permanent TSB. “The rating actions reflect our view that industry risks have decreased for Irish banks, as we believe that improvements in banking system profitability and lower risk appetite will prove enduring,” the ratings firm said.