State to further reduce shareholding in AIB to 32.6% following €999m share buyback

Mr McGrath said the proceeds from the transaction will be held within the Irish Strategic Investment Fund while he examines "how best to use them for the benefit of the State."

The state has reduced its shareholding in AIB once again after the lender bought back almost €1bn in its shares from the Government.

The transaction, which AIB shareholders approved at its recent extraordinary general meeting, will see the Government’s stake in the bank fall to under a third at 32.6%, down from 71% at the beginning of 2022.

AIB said that the off-market purchase reached a final price of €5.0395 per share.

Speaking on Friday morning, Finance Minister Michael McGrath welcomed the transaction, adding that when the buyback is combined with the latest annual dividend of €273m to be received next week, the total amount returned to the State from its investment in AIB will reach around €14.9bn.

Mr McGrath said the proceeds from the transaction will be held within the Irish Strategic Investment Fund while he examines "how best to use them for the benefit of the State."

"While the State remains the largest shareholder in AIB, this is another important step in normalising the relationship between the State and AIB with the free float in the bank now increasing to around 67.4%," Mr McGrath added.

"It continues to be this Government’s belief that banking in the main is an activity that should be provided by the private sector."

Chief executive of AIB, Colin Hunt said the transaction marked another important milestone in the process of "repaying the taxpayer, enhancing liquidity in AIB shares and normalising the share register."

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

Last year, €215m worth of State shares in AIB were sold back to the bank. 

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