Government ends majority control over AIB for first time since banking bailout

Finance Minister Michael McGrath confirmed the situation.

The Government has ceded majority control over AIB for the first time since the bank was bailed out by taxpayers 12 years ago, Finance Minister Michael McGrath has confirmed. 

A placing of shares with investors amounting to 5% of the bank brings the stake owned by the Government to just below 47%, and further reductions are likely in the coming months after Mr McGrath extended the Government's so-called share trading plan to late January next year. 

The shares placing raised €412m and is the latest move by the Government to return AIB to full private ownership. 

The Department of Finance launched an initial sale of AIB shares five years ago on stock markets which then reduced its stake to 72%. 

It said it has raised a total of €698m since January last year when it started its current programme of share placings. 

During the financial crisis, taxpayers injected a total of €42bn to keep the doors open at AIB, Bank of Ireland, and  Irish Permanent, as well to cover the costs entailed by the collapse of Anglo Irish and Irish Nationwide.     

The Government, which sold down its last remaining small shareholding in Bank of Ireland last year, has been helped by the share price gains chalked up by the Irish banks ever since the European Central Bank started to hikes rates last summer, and by the lessening in competition with the withdrawal of key rivals Ulster Bank and KBC Bank. 

AIB shares have soared 57% from a year ago to value the lender at €10bn, while Bank of Ireland shares have climbed 34% to value the lender at €9bn.