Noonan issues warning against buying AIB shares

Finance Minister Michael Noonan has issued an AIB shares warning and said people who buy into the stock now will lose money.

Mr Noonan said the shares were not structured correctly.

“So it wouldn’t be a good idea to buy AIB shares at the moment. They have to be restructured first.

“With the number of shares out there, the value attributed to the shares on the stock market at the moment would put a nominal value of €55bn on AIB. It’s not worth that. So the shares are over valued, but it’s because of the restructuring. So I am issuing a kind of a warning to investors, wait until it’s restructured before you buy. If you buy now you’ll lose money,” he said.

Mr Noonan said the policy always has been that the banks would be restored to private ownership in due course.

“Now that the banks have passed a stress test, and we are talking particularly about AIB, we will start the process of planning for that. But it will be a long process and I am not announcing an imminent sale of AIB or anything like that,” he said.

“I am saying that before very long, certainly before Christmas, all interests will come together, that’s the Department of Finance, AIB and some outside advisers, and we will start the precess of laying out a blueprint which would lead then over quite a significant number of years of restoring the bank to the private sector through a public selling of the sales,” he added.

Mr Noonan was speaking at the opening of AIB’s revamped self-service lobby at it’s O’Connell Street branch in Limerick.

AIB chief executive, David Duffy said that loan draw-downs by small and medium enterprises (SMEs) in the mid-west were up 24% in the first nine months of 2014 compared to the same period last year.

Mr Duffy said: “The figures show we have approved €292m for businesses in Limerick and the mid-west in the year to September, while we have opened 1,163 new business start up accounts so far this year. It is very heartening to see these business start-up accounts opening at the rate of 110 per month.”

Mr Noonan added that SMEs are the lifeblood of the economy and are playing a crucial role in the economic recovery.


Lifestyle

Halloween has really upped the ante in recent years here, hasn’t it?We have moved on considerably since the days of a bin liner fashioned with holes for arms and necks

Sandhoppers for breakfast? It’s just not cricketCrickets for lunch anyone? Time - is running out - to get over our western food prejudices

Why did the Neanderthals go extinct?, asks Richard CollinsDid ear and chest infections wipe out our neanderthal ancestors?

Corkbeg Island near the mouth of Cork Harbour is today an industrial location with Ireland’s only oil refinery whose silver cylinders dominate the low-lying island like giant mugs, writes Dan McCarthy. Islands of Ireland: 'Tanks' for the memories Corkbeg

More From The Irish Examiner