AIB to decide whether to proceed with buyback after shareholder approval

Reuters

AIB's board will decide over the coming week whether a proposed direct share buyback from the State should proceed after it was approved by shareholders on Thursday amid a drop in its share price since the plan was announced on March 5th.

AIB announced the €1.2-billion buyback with the Government, a 12 per cent shareholder, in early March as part of a boost to shareholder returns.

However, its share price has since fallen below the minimum price set for the buyback of €6.26 apiece due to a global stock market rout unleashed by US president Donald Trump's tariffs.

AIB shares were 0.8 per cent lower at €5.92 on Thursday afternoon, up from a low of €5.16 on April 9th but well below the €7 they touched on March 5th.

Shareholders approved the buyback proposal at AIB'S annual general meeting on Thursday, with 97 per cent voting in favour. The bank's board has until May 8th to decide whether the plan is in the bank's best interests, AIB said in a trading update.

"We're obviously dealing with a high degree of uncertainty externally and quite volatile market conditions, but let's wait and see what happens over the coming days," AIB chief executive Colin Hunt told reporters after the meeting.

The Government agreed in principle to the buyback proposal a month ago and said it could cut its shareholding in the bank to around 3 per cent from 12 per cent currently as it aims to exit the bank entirely this year.

A shelving of the buyback would delay the exit from a bank it effectively nationalised in 2010 when it pumped in €21 billion following the banking crash. The lower share price may also slow a separate gradual selling of shares.

AIB on Thursday reiterated its full-year guidance provided in March. It said its first-quarter net interest income had fallen in line with expectations and its core tier 1 capital ratio grew strongly to 16.8 per cent from 15.1 per cent three months earlier.