€215m worth of State shares in AIB to be sold back to bank

Finance Minister Michael McGrath said given the strong rise in AIB’s share price over the past year, the decision was made to participate in the buyback programme on a 'directed basis'

The sale will see the State's shareholding in the bank reduce by 1% to 53.4%. Picture: Denis Minihane

Finance Minister Michael McGrath has announced the State will take part in AIB’s 2023 share buyback programme which will reduce the country’s ownership stake in the bank to 53.4%.

The buyback will see AIB acquire €215m of its shares back from the State in an off-market purchase. 

The buyback was set at a price of €3.938 per share — the closing price on Euronext in Dublin on Monday this week. The transaction is expected to settle on Wednesday this week. 

The sale will see the State’s shareholding in the bank reduce by 1% to 53.4%.

This share buyback programme will be in addition to the payment of a proposed €166m cash dividend to all shareholders by AIB.

On the sale of the shares, Mr McGrath said given the strong rise in AIB’s share price over the past year, the decision was made to participate in the buyback programme on a “directed basis”. 

“This will be another positive step for both AIB and the State, with our shareholding reducing further and recovering an additional €215m from our investment in AIB.

“When combined with the annual dividend already announced, the State expects to receive a total of approximately €306m from the company, which will be paid to the exchequer, bringing to €12bn the total amount returned to the State since 2010,” he said.

Mr McGrath said the remaining shareholding in AIB is currently worth an estimated €5.5bn.

I will continue to monitor market conditions for further opportunities to reduce the State’s shareholding in AIB.” 

The Department of Finance was advised by NM Rothschild & Sons Limited and William Fry LLP in relation to this transaction.

Last year, AIB completed a €91m share buyback programme in which the State participated on a proportionate basis.

During the bank bailouts following the financial crisis, the State invested about €21bn in AIB in order to rescue it.