Ireland has reduced its shareholding in Allied Irish Banks (AIB) to zero, completing its return of the bank to private ownership after the financial crash.
AIB’s exposure to Ireland’s property market crash nine years ago brought the country to its knees and triggered a 20.8 billion euro bailout to save the lender from the abyss.
Acknowledging the full return to private ownership on Tuesday, AIB said it “owes an immense debt of gratitude to Irish taxpayers”.
The sale of the State’s final holding in AIB is expected to generate more than 300 million euro upon settlement and bring the total amount returned to Ireland from its investment in the bank to around 19.8 billion euro.
The State is also considering its options with regard to warrants it still holds in AIB, including the bank purchasing them back.
Including the warrants, the completion of disposal will leave the bank hundreds of million euro short of repaying the full bailout amount.
However, the Department of Finance said the State is around 600 million euro above break-even on its 29.4 billion euro bailout in AIB, Bank of Ireland, and PTSB.
Minister for Finance Paschal Donohoe said: “This is an important milestone in delivering on the Government’s policy of returning the banking sector to private ownership.
“When I announced the launch of the share trading plan in December 2021, I commented that banking is an activity that involves taking credit risk and therefore should be provided by the private sector.
“It follows that 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 AIB into a rising market has been successful in delivering on this objective for our citizens.”
AIB Group chief executive officer Colin Hunt, said: “Reaching this milestone 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.
“Since then, our focus has been on rebuilding trust, repaying the State and continuing to support our customers, communities and the wider economy.
“The Group has undergone significant transformation and through the implementation of our proven strategy, we are well-positioned to continue generating value for all our stakeholders over the medium-term. With our market-leading customer franchise, resilient revenues and a strong capital position, we remain confident in the strong fundamentals of our business and our ability to play a positive role in the Irish economy, helping to build a more sustainable future for our customers while delivering sustainable returns for our shareholders.”
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