Government Stake In AIB Falls Below 50% After Latest Share Sale

Wednesday, 28 June 2023 11:32

By Caoimhe Harney

A Socialist TD has criticised the move claiming it's not in "the best interests of society."

The Minister for Finance has sold another 5% of the State's stake in AIB, which sees the bank exiting majority ownership for the first time since the financial crisis over a decade ago.

The stake was sold through an institutional placing, with the price set by an accelerated "book building" process.

This is a method of offering shares for sale to the market in a short time period of one to two days, with little or no marketing.

The sale sees the State's shareholding in the bank reduce from 51.9% to approximately 46.9%.

Socialist Party TD Mick Barry this morning strongly criticised the Government's decision to privatise Allied Irish Banks.

His comments came in the wake of an overnight sale of 5% of the banks' shares which brings the bank from majority public ownership into a majority private ownership situation for the first time since the bank bailouts of 2011.

The sale is being described as a milestone along the road to privatisation with the Government extending the share trading deadline to late February 2024 and expectations that the State's share may be reduced to as low as 40% by the end of this year.

Deputy Barry commented: "The last time this bank was in private ownership it crashed onto the rocks and taxpayers had to rescue it with a multi-billion euro bailout.

"A bank that is run for profit can never be a bank which is run in the best interests of society," he insisted.

"Minister McGrath's decision to privatise the banks might not have the same disastrous outcomes this time around but at the very least it will make it more likely for ECB interest rate hikes to be passed to bank customers, more pressure for hard pressed mortgage holders and more challenges for young people trying to secure a mortgage to buy a home," he added.