State set to choose AIB strategic advisers

The Department of Finance is preparing to pick banking advisers next week, as it weighs how to recoup a €21bn taxpayer bailout of AIB.

The department will choose from a panel of 11 potential advisers, including Citigroup, Goldman Sachs, Deutsche Bank and UBS.

The Government chose the panel last year to provide future capital market, strategic and restructuring advice on state-owned banks.

“It is expected that advisers will be announced early next week,” Brendan Loughnane, a finance department spokesman, said. “They will be looking at all aspects around AIB and future plans for the recovery of government aid.”

AIB’s rescue accounted for a third of the €64bn Ireland injected into its banks after a real estate crash in 2008.

The bank’s chief executive, David Duffy, has said he may begin repaying the rescue by redeeming €1.6bn of state-owned contingent convertible notes.

Finance Minister Michael Noonan said, last month, the Government may sell part of its 99.8% stake in the nation’s second-largest lender by assets within two years.

The National Treasury Management Agency valued the State’s equity stake and €3.5bn of preferred stock in AIB at €11.7bn at the end December, it said yesterday. The government’s CoCo notes are held separately.

Before a share sale begins, the state may convert some of its preferred stock in AIB into ordinary shares, the bank has said. The state may also sell some preferred shares to private investors, according to analysts including Eamonn Hughes at Goodbody Stockbrokers.

* Bloomberg