AIB has paid a €280 million cash dividend on its 2009 preference shares to the Ireland Strategic Investment Fund (ISIF), an entity that operates under the umbrella of the National Treasury Management Agency (NTMA).

“This is the first time this dividend has been paid by AIB in cash and is reflective of the progress and improved performance of AIB Group,” the bank said in a statement.

AIB, which is 99.8 per cent owned by the State, said earlier this mornth it was profitable in the first quarter of this year. Its net interest margin, excluding guarantee fees, increased to 1.87 per cent.

The ISIF, which is the replacement for the National Pensions Reserve Fund, has a statutory mandate to invest to support economic activity and employment in Ireland. Its first fully-fledged investment took place in March when it invested €50 million in Malin, a biotech investment vehicle set up by former Elan executives.

It is also an investor in the Carlyle Cardinal Ireland fund which is backing a management buyout of Carroll Cuisine from Swiss-Irish food giant Aryzta, and in BlueBay Ireland, which provided debt financing for the recent buyout of Denis O'Brien's coffee and muffin chain BBs.