Michael Noonan hints at 2018 AIB sale as BoI acts on trackers

Bank of America Merrill Lynch, Davy and Deutsche Bank have formally been appointed to assist the Government in its attempts to return AIB to public ownership.
Michael Noonan hints at 2018 AIB sale as BoI acts on trackers

The Government unveiled the names yesterday following a recent tender process.

However, despite analysts expecting a spring or autumn 2017 sale of around 25% of the State’s 99% AIB stake, the Government yesterday said no fixed timetable has been decided upon and it could be into 2018 before a sale takes place.

The advisers have been taken on for a period of 18 months.

“As previously indicated, the appointment of global co-ordinators does not signal any intention or obligation for the minister for finance to proceed with an IPO within any particular timeframe, and any decision to proceed with a transaction will be subject to Government approval and market conditions”, the Department of Finance said yesterday in a statement, adding that a process to select “a number of other banks” for the selling syndicate will also take place at “a future date yet to be determined”.

Finance Minister Michael Noonan said the appointments were “an important step” for a partial sale.

“There remains no fixed timetable for any sale at this time as it will depend on market conditions among other things. These appointments will ensure that the State has the option to sell some of the State’s shareholding in AIB during 2017, or indeed early 2018, as provided for in the Programme for a Partnership Government,” the minister said.

AIB is being advised by Morgan Stanley and Goodbody Stockbrokers while Rothschild is still acting as an independent adviser to the Government.

Last month, AIB published a strong trading performance for the first nine months of the year — showing net interest margin, a key measure of profitability, rising by 2.16% — indicating to many it is ready for sale.

Meanwhile, Bank of Ireland has said its tracker mortgage redress investigations have identified 602 accounts where “a right to, or the option of, a tracker rate of interest was not provided to the customer in accordance with their loan documentation.”

All of the major lenders are undertaking redress programmes after customers were wrongly moved from low-interest rate products when seeking to switch to a tracker mortgage.

BoI is the only one not to have said how much it is setting aside for compensation.

However, it said its review also identified a small rate differential on 3,916 accounts currently on a tracker rate of interest which is not the rate specified in the account loan documentation.

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