Implied €50bn valuation of AIB ‘seems to be anomaly’

ALLIED Irish Banks, the country’s second-largest bank by assets, has a market value bigger than UBS and Barclays, even after its third bailout by the Government.

The taxpayer last week bought €5 billion of new shares in the bank for 1 euro cent each, giving it a 99.8% stake. That left investors with a stake valued at €100 million. Allied Irish has since traded at between 9 cents and 12 cents, for a market value of as much as €61.6 billion, three times the peak of February 2007.

“The implied valuation of Allied Irish at about €50bn makes little sense and seems to be an anomaly,” said Stephen Lyons, analyst with Dublin-based securities firm Davy. “The increase in the Government’s stake has not been fully digested.”