The Department of Finance has signed off on AIB’s plan to buyback more than €1 billion worth of shares in the lender from the State.
Minister for Finance Paschal Donohoe “has agreed in principle to AIB Group plc’s latest share buyback proposal,“ the department said in a statement.
If shareholders sign off on the proposal and market conditions are favourable, then AIB would buy €1.2 billion of its shares from the State in an off market deal. The move would reduce the State’s shareholding to about 3 per cent from the current 11 per cent.
Investors will vote on the proposal at AIB’s annual general meeting on May 1 and, assuming it is approved, the bank would buy the shares “shortly after,” the department said.
“I can now confirm that I have agreed in principle to participate in this buyback on a fully directed basis,” Mr Donohoe said. “The successful completion of this transaction will see a further €1.2 billion returned to the State which will be in addition to the circa €100 million in dividends due to be received in May 2025 while also allowing the State to further reduce its shareholding in AIB and get closer to exiting its position in the bank. Further details in relation to this transaction will be announced in due course."
The bank is financing the deal out of its excess capital, AIB said in a statement.
The price per share payable will be “the higher of (i) €6.2607 less 36.984 cent (to account for the proposed dividend for 2024)... and (ii) a price per ordinary share equal to the volume-weighted average price of ordinary shares traded on Euronext Dublin for the five business days immediately preceding 1 May 2025," it added.
A buyback would effectively clear the way for the State to exit the bank altogether later this year, almost 17 years since bailing out lender. At it’s peak the State held more than 70 per cent of the lender but has been selling down steadily since 2022.
