Conditions aligned for AIB shares sale: Bernard Byrne

Market conditions are aligned for Finance Minister Michael Noonan to give the green light for a shares’ sales in AIB in early summer, chief executive Bernard Byrne has said.

The Government has said it could sanction a sale of shares in AIB shares, in a period starting by late May to early July, should market conditions permit.

It was forced to halt plans to sell AIB shares last year when world banking valuations went on the slide.

However, a relief rally this week sparked by the first round of the French presidential elections on Sunday has boosted the prospects for a successful sale by the Government, analysts have said.

Speaking to reporters, Mr Byrne said four conditions that were necessary before an initial public offering could go ahead were now in place but the decision on the timing of a sale obviously remained in the hands of the Government.

The conditions were an attractive equity market, a bank that was performing, an economy that was performing well, and the political will to execute a shares sale. He said they were all in place. The bank is encouraging the Government to go ahead with the sale in the early summer, he said. He said the result of the French election recently had helped improved the market conditions for a sale.

Referring to recent comments by Mr Noonan that the UK election wouldn’t disrupt the timing of any sale, Mr Byrne said his view was also the election would not be highly significant for the AIB sale.

The bank has a three-year target to reduce the amount of non-performing loans on its loan book to a ‘normalised’ level of 5%, equivalent to a net value of €3bn. In gross terms, AIB holds €8.6bn of non-performing loans. He said that was “a good run rate” given the value of non-performing loans was €29bn three years earlier.