State to sell its stake in Bank of Ireland in phased exit

State invested €4.7bn in the bank in the wake of the financial crash

CEO Francesca McDonagh: "State investment in Bank of Ireland over a decade ago should never have been needed."

The Government has announced it will sell part of the State’s 13.9% shareholding in Bank of Ireland over the next six months.

The Minister for Finance, Paschal Donohoe TD said it marks the start of a phased exit from the State’s remaining investment in the Bank. 

The State had stepped in to support the bank in the wake of the financial crash in early 2009. The total investment in Bank of Ireland was €4.7bn. By 2013 Bank of Ireland had returned approximaetly €6bn to the State.

"When all cashflows are taken into account the taxpayer has already recorded a surplus on its investment in and support for the bank, even before the sales of these shares are accounted for," the Minister said.

"A trading plan enables the State to sell down its shares in a low cost carefully controlled manner while avoiding the need to try to time our disposals with market conditions”.

Citigroup Global Markets Limited were appointed to carry out the sale and have been mandated to carry out an orderly sell-down of shares. Shares will not be sold below a certain price per share which the Department of Finance will keep under review. 

The CEO of Bank of Ireland Francesca McDonagh welcomed the announcement describing it as a positive step for taxpayers, the economy and the Bank.

"State investment in Bank of Ireland over a decade ago should never have been needed, but we will always be grateful for the support we received. We repaid the taxpayer by 2013, and again thank the State and Irish taxpayer for their extraordinary support," she said.

"Today’s announcement commences a process which will add to the returns already received, and also marks an important moment in normalising the relationship between the Irish State and Bank of Ireland.”