State set to exit AIB this year as €1.2bn share buyback proceeds

The Government is on track to sell its final shares in AIB within months after the bank proceeded with a buyback of €1.2 billion of taxpayers’ shares.

A transaction had looked doubtful in recent weeks as AIB’s shares had slumped following US president Donald Trump’s tariffs announcement.

However, AIB stocks rallied on Wednesday to within half a cent of the price at which the deal had been agreed.

"We are very pleased to make a payment of an additional €1.2 billion to the State through the buyback of a further tranche of AIB shares," said Colin Hunt, AIB’s chief executive. "Today’s development represents another important milestone in the process of repaying the taxpayer for their support, the normalisation of the group’s share register and enhancing liquidity in AIB shares."

Minister for Finance Paschal Donohoe said the State was now no longer the largest shareholder in AIB.

"Through the share trading plan, which continues to be operational, our shareholding will continue to reduce with a clear path to exiting our position in the company over the coming months," Mr Donohoe said in a statement.

It is expected that the final shares will have been drip-fed on to the market by the time AIB publishes its interim results on August 1st.

Based off AIB’s current share price, the State is on track to recoup €19.9 billion in total from the bank.

"On an overall basis, based off current market prices, the State is circa €300 million above break-even on its €29.4 billion investment in AIB, Bank of Ireland and PTSB," Mr Donohoe said.

The Government is likely to lift executive pay restrictions at the bank once the final shares are sold, similar to how Bank of Ireland was released from this crisis-era restriction in 2022 when the State exited its investment in that bank.