Value of State’s holding in AIB falls by €900m

The value of the State’s holding in AIB was €11.3bn at the end of December – down €900m since the previous year.

The Government owns more than 99pc of AIB after pumping around €21bn into the bank to save it from collapse after the financial crisis.

The Ireland Strategic Investment Fund (ISIF) also valued the State’s 14pc stake in Bank of Ireland at €1.1bn. AIB was valued at €11.3bn. This compares with €12.2bn at the same time last year. A spokesman for Finance Minister Michael Noonan said the drop in value does not change the Government’s plans for selling 25pc of the State-owned lender. Mr Noonan has said a sale could take place as early as May or June.

The spokesman said there was no surprise in the valuation, which is based on publicly-available information only.

“AIB results in two weeks will render it obsolete,” the spokesman added. “There are no resultant change for any IPO plans.”

Mr Noonan had held off on firing the starting gun on an AIB listing for more than a year, citing market conditions.

In January, Mr Noonan said the Government would likely trigger an initial public offering (IPO) for AIB in May or June.

There is no realistic prospect of recouping all of those bailout costs in the short term.

The Government plans to sell a 25pc stake in the bank to institutional investors, and to use the proceeds to reduce the national debt.

Nearest peer Bank of Ireland and other European banks, notably including Deutsche Bank, have seen their shares come under pressure over fears lenders are struggling to make profits as long as official interest rates remain at historic lows.

Mr Noonan has insisted the full bailout cost will be recovered over time.Last month Goodbody stockbrokers said the State-owned bank would likely pay a €285m dividend in the coming months. The bank has returned €1.8bn to the State, of debt issued as part of the bailout, and a dividend. The minister has long committed to selling all State holdings in rescued banks over time. As well as almost all of AIB, taxpayers remain the biggest shareholders in Bank of Ireland and Permanent TSB, all as a result of crash-era rescues.
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