AIB said it owes an immense debt of gratitude to Irish taxpayers

State bailed out the bank during the crash with a €21bn investment

The share sale will reduce the state's ownership to zero.

The State is to sell off the remaining shares it holds in AIB, the bank it bailed out during the financial crash.

The Minister for Finance, Paschal Donohoe said it was his intention to exit the State’s directed shareholding in AIB by way of an accelerated bookbuild (“ABB”) transaction.

"This ABB transaction represents our seventh such disposal in AIB and will reduce the State’s directed shareholding in the bank to zero. This is an important milestone in delivering on the government’s policy of returning the banking sector to private ownership," he said.

AIB shareholders voted to buy back €1.2bn worth of shares from the State last month, which pared the state’s share to just 3%, which will now be fully chipped away.

During the bank bailouts following the financial crisis, the State invested about €21bn in AIB to rescue it. Billions of taxpayers' money was also injected into Bank of Ireland and Irish Permanent, as well as to cover the costs entailed by the collapse of Anglo Irish and Irish Nationwide.

Once complete, the share sale will close a significant chapter of the financial crisis. The Government sold down its last remaining small shareholding in Bank of Ireland in 2022. It still holds a 57% stake in Permanent TSB.

The sale of shares, along with an annual dividend of approximately €100m each year, means approximately €19.7bn will be returned to the taxpayer. Minister Donohoe said that, overall, the State is about €300m above break-even on its €29.4bn investment in AIB, Bank of Ireland and PTSB.

AIB Group Chief Executive Officer Colin Hunt said it is a significant day for the Group. "AIB profoundly regrets that the institution had to be rescued by the State almost two decades ago and owes an immense debt of gratitude to Irish taxpayers for the support provided during that challenging time," he said.

In March, AIB posted a record annual profit haul of €2.35bn for 2024 after tapping into the surge in European Central Bank interest rates, while facing little competition domestically to offer attractive deposits. 

Recent years has seen competition in the Irish banking sector drop with the departure of Ulster and KBC banks. Earlier this year, AIB CEO Colin Hunt said the bank had paved a "clear path to return to full private ownership this year."

The AIB share price has performed strongly in recent weeks. It was up 1.08% to close at €7.01 today.

Once fully private, AIB will likely be free from the €500,000 salary cap put in place by the government in 2009. The bank had sought the removal of the cap as the State ownership was reduced, but the government has resisted.