State exits Bank of Ireland returning €6.7bn to taxpayers

The State pumped €4.7bn into Bank of Ireland in 2009 during the financial crash.
State exits Bank of Ireland returning €6.7bn to taxpayers

Bank of Ireland is the first Irish lender to return to private ownership in full since the Government pumped €64bn into the financial system in 2009. Picture: Denis Minihane.

The State has sold its remaining shares in Bank of Ireland, completing the bank's return to private ownership. 

The Government stated that it had recovered almost €6.7bn in cash from the sale of its shares, this comes after €4.7bn of taxpayer funds were used to support the bank during the financial crisis.

Bank of Ireland is the first Irish lender to return to private ownership in full since the Government pumped €64bn into the financial system in 2009.

Minister for Finance, Paschal Donohoe said: "Taxpayer funds which were used to rescue the Irish banks, should be recovered and used for more productive purposes."

"The gradual disposal of the State’s investment in Bank of Ireland into a rising market has been successful in delivering on this objective for our citizens," he added.

The trading plan for the sale of the shares was managed by Citigroup Global Capital Markets and the proceeds of the sale total approximately €841m. 

The State's shares in the Bank of Ireland were sold at an average price of €6.17 per share in phase three of the trading plan. This was an increase from an average of €5.64 in phase two and €4.96 in phase one.

The Government's stake in PTSB is expected to decline to approximately 62.4% later this year, down from 75%.

AIB is the State’s largest remaining investment in the financial sector, the stake in the bank has been reduced from 71.2% to 63.5%.

Collectively the State's shares in PTSB and AIB are estimated to be worth over €4.7bn.

Gavin Kelly, interim group chief executive of Bank of Ireland, said: "The completion of the sale of the State shareholding in Bank of Ireland is a very positive moment for Irish taxpayers, for Bank of Ireland, and for the sector as a whole."

Mr Kelly added that the return of the bank to private ownership will allow it to "move conclusively beyond the financial crisis, and is a very important step towards full normalisation of our relationship with the State".

The State has been gradually selling its shares in the bank since June last year.

The share-selling process was originally scheduled to finish in January. However, Mr Donohue extended the deadline in May.

In 2009, during the financial crash, the State pumped €4.7bn into Bank of Ireland. The State also sold a 5% stake in AIB earlier this year, which reduced its shareholding to 63.5%. The sale generated €305m for taxpayers.

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