AIB buys back €500m worth of shares from State

Government's share of the bank down to 22%.

AIB has announced a further €500m share buyback from the State, which will see the Government’s ownership of the bank reduced down to 22%.

The off-market purchase of nearly 92 million shares from Finance Minister Jack Chambers was agreed at a price of €5.445 per share — the closing price of trading on Monday last week. The purchased shares represent about 3.8% of the bank’s issued share capital.

AIB said it now intended to cancel these shares, after which the bank will have over just over 2.3 billion shares in issue.

Chief executive of AIB Colin Hunt said this repurchase brings payments to the State to €3bn so far this year.

“The transaction is another important milestone in the process of repaying the taxpayer for their support, enhancing liquidity in AIB shares and normalising the share register,” he said.

Following a very strong first half and with momentum in our business, AIB continues to support our 3.3 million customers, our communities and the wider economy while delivering attractive, sustainable returns for our shareholders.

Mr Chambers said this share buyback was a “further positive step for both AIB and the State”.

“It further normalises the relationship between both parties with the ultimate aim of getting the bank back into full private ownership," he said. 

“The proceeds from this transaction will be held within the Irish Strategic Investment Fund while I examine how best to use them for the benefit of the State.” 

During the bank bailouts following the financial crisis, the State invested about €21bn in AIB to rescue it. So far, only €16.6bn has been returned.

In May, AIB bought back nearly €1bn in shares from the Government, which at the time reduced the Government’s ownership down to 32%.

At the beginning of 2022, the Government held 71% of the bank.