AIB shares fall 9% over moves to nationalise

AIB’s share price dropped by almost 9% yesterday, on the back of speculation that the Government could move to nationalise the bank before Christmas and a fresh credit downgrade.

While the Government’s stake in the country’s largest bank is still technically around 18%, an increase to near total ownership has been viewed as being only a matter of time, in order to bring the bank up to fresh capital standard levels.

However, media reports over the weekend suggested that the move could be made this week and could also see the slightly surprising move of the State taking full control of AIB, leaving no element of it still listed on the Irish Stock Exchange. The bank was declining to comment on the reports, yesterday, as was the case with the Department of Finance.