Government extends AIB share trading plan to July

AIB has welcomed the Government’s decision to resume selling down its bailout-era stake in the bank over the coming months.

On Friday, the Department of Finance said it would be extending the AIB share trading plan into a third phase, which is expected to run until July unless extended again by the Minister.

The Government has so far reduced its stake in the bank from 71 per cent at the beginning of 2022 to about 57 per cent, most recently with the placement of 134 million shares at a price of €2.96 each in November, generating returns of €121.5 million.

After that, the scheme was paused for a period but is set to resume “over the coming days”, the department said in a statement. The third phase of the trading plan is expected to run until the end of July.

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The sales have so far generated roughly €286.4 million since the plan became operational 12 months ago.

Speaking on the News at One on RTÉ Radio 1, Minister for Finance Michael McGrath said it was not possible to say when the State would finally exit from its shareholding in AIB. However, he said: “For now, we’re not anticipating reaching that [stage] in the weeks ahead.”

Asked when the cap on bankers’ pay would be lifted following the further reduction of the Government’s stake, Mr McGrath said: “No decision has been made in relation to that. Before Christmas, a decision was made in relation to Bank of Ireland. When it comes to the remaining banks that are subject to the cap – AIB and Permanent TSB – that decision will be reviewed as the State’s shareholding reduces.

“We have not set a specific level of State shareholding at which that review will be triggered. So that is something which I and the Government will consider over the months ahead as we reach that point.

“Given the success of the AIB trading plan since it became operational a year ago, I can see the merit in renewing the trading plan into a third phase,” Mr McGrath said. “In line with the Government’s commitment to deliver best value for the taxpayer, shares will not be sold below a predetermined floor price, which the Department of Finance will keep under review.”

AIB has returned about €11.5 billion of cash to the Government since its €20.7 billion crisis-era bailout, with the taxpayers’ remaining holding in the bank estimated to be worth €4.75 billion after the last sale in November.

Colin Hunt, the bank’s chief executive, welcomed the Minister’s decision to resume the trading plan and said it was “an important development in the process of returning the State’s investment in the group”.