Finance minister Michael Noonan officially announced Tuesday night government plans to sell a 25% stake in AIB, returning part of the bank into private hands. This marks AIB’s dramatic return to the London Stock exchange since it was nationalized almost 7 years ago during the last financial crisis.
Currently 99.9% government owned, the sale of AIB shares will likely be the largest stock market listing of 2017. Analysts estimate that the sale of shares will raise more than €3 billion for the government, contributing to AIB’s slow and steady return of the €20.8 billion of bailout loans it received from 2009 to 2011.
AIB is Ireland’s biggest lender, and since it’s nationalization, has worked hard to renew its image, slashing the amount of bad loans from 29 billion to 8.6 billion. With that and already €6.8 billion of taxpayers’ money returned, AIB CEO Mr. Bernard Byrne hopes the upcoming sale of shares will continue the bank’s process of recovery and reaffirms investor confidence.
Although there appears to be plenty of investor interest, small retail investors shouldn’t be too excited to jump on the bandwagon. CEO Byrnes said that most of the shares will likely end up in the hands of large institutional investors. Furthermore, he has yet to give any information on AIB’s possible share price, though it is almost certain it will be worth less than its current price on secondary stock markets, which have surged in value on Wednesday.
Estimates indicate the 25% of shares will represent a market capitalization of €12 billion, around the same as what the bank is officially valued at. Shares will likely be traded late June after the deal is finalized.