State reduces AIB stake to 22pc

Last month, AIB announced that they had received regulatory approval for a further €500m share buyback.

The transaction, which was completed on a directed basis between AIB and State, saw the bank acquire €500m of its shares by way of an off-market purchase.

Following the completion of this share buyback, the State’s shareholding has declined by a further 2.84pc.

The shares were bought at a final price of €5.445 per share.

“The price achieved on this transaction represents the highest AIB closing price since February 2018,” Finance Minister Jack Chambers said.

“The proceeds from this transaction will be held within the Irish Strategic Investment Fund while I examine how best to use them for the benefit of the State,” he added in a statement.

The Government has been gradually reducing its ownership in the bank in recent years. It was forced to nationalise AIB in 2011 due to huge losses resulting from bad loans during the Celtic Tiger.

Around €16.6bn has been returned to the State from its investment in AIB to date, while the Government’s stake in the bank has dropped from around 71pc at the start of 2022 to 22.04pc today.

AIB chief executive Colin Hunt said that payments to the State had reached €3bn so far this year.

“The transaction is another important milestone in the process of repaying the taxpayer for their support, enhancing liquidity in AIB shares and normalising the share register,” he said.

Mr Chambers added that the Government wants to continue to normalise the relationship between the State and the bank.

“It continues to be this Government’s belief that banking in the main is an activity that should be provided by the private sector and that taxpayer funds which were used to support the banking sector should be recovered and put to more productive uses like enhanced delivery of public services and helping us to overcome many of the challenges we face now and into the future including areas like housing and public infrastructure,” he said.