Bank set to start repaying €20bn to Government from early next year

AIB will be in a position to start repaying the State’s €20bn investment in the lender from the first half of next year onwards, according to chief executive David Duffy.

How much the Government recoups depends on how profitable the bank becomes over the next few years. As it stands, the bank’s most immediate challenge is clearing up its capital structure prior to a sale. The Government has €3.5bn in preference shares in AIB. There was market speculation a few months back that the Government would look to sell these preference shares to private investors.

However, in its results statement the bank said: “The Department of Finance has indicated that it will enter into discussions with AIB during 2014 regarding AIB’s future capital structure, including the potential conversion of the 2009 preference shares into equity and potential options, in respect of the contingent capital notes.”