The Daily Telegraph

AIB nets €3bn in ‘milestone’ listing for Irish recovery

Lender’s shares leap after it sells 29pc stake in biggest flotation in Europe this year following overhaul

- Banking Correspond­ent By Ben Martin

ALLIED Irish Banks has raised at least €3bn (£2.6bn) for Ireland in a stock market float that valued the oncestrick­en lender at €12bn and marked one of the biggest listings in London in recent years.

The lender sold a 28.7pc stake to investors priced at €4.40 a share, in a deal that has been hailed as a milestone for the country’s recovery from the financial crisis and an important test of investor appetite for Irish banking stocks.

The shares, which are also listed in Dublin, ended up 5.5pc at €4.65 in conditiona­l trading in London.

AIB was bailed out to the tune of €20.8bn in 2010, handing the government a 99.9pc stake, as Ireland’s banking system teetered on the brink of collapse following the nation’s property crash.

Ireland itself was forced into a €67.5bn EU rescue because it could not afford to prop up its banks without help from Brussels.

Including the €6.8bn that has already been returned to the Irish government through coupons, dividends, the redemption of preference shares and bonds, and fees, the float means the taxpayer has now recouped nearly half the cost of the AIB rescue.

“This is a landmark day for the bank and puts the total cash paid to the state since its bail-out at almost €10bn,” said Bernard Byrne, AIB’S chief executive. “The level of investor interest and support for AIB and Ireland is a great vote of confidence in the strength of the turnaround in the bank and the wider economy.

“It paves the way for the full recovery of the investment in AIB, over time, as we return to full private ownership.”

As part of flotation, AIB sold a 25pc stake to investors, raising €3bn, and then sold another 3.7pc in an over-allotment option. The €400m raised from this will be held for 30 days by Deutsche Bank, which advised on the IPO, to be used to support the share price in coming weeks if needed.

Michael Noonan, Ireland’s former finance minister, has warned that it could take as long as a decade to fully re-privatise the lender in such a way that ensures the taxpayer enjoys a profit on the original investment.

The float was originally unveiled at the end of last month and the €4.40-ashare price is in the middle of the range that was targeted.

It is a significan­t boost for the London stock market, which has suffered from a dearth of big listings since the EU referendum vote a year ago dampened demand for share sales in the UK. It is also biggest float in Europe so far this year.

Paschal Donohoe, Mr Noonan’s successor, said the sale “has created a strong platform for the state to recover all the money it has invested in AIB and to further dispose of our banking investment­s for the benefit of the Irish people”.

Unconditio­nal trading in London and Dublin is due to start on Tuesday.

The money from the share sale will be used to pay down 1.5pc of Ireland’s national debt, which totals €200bn.

Under Mr Byrne and his predecesso­r David Duffy, AIB has undergone an overhaul which has seen thousands of jobs slashed and a re focus on Ireland. Mr Duffy now helms CYBG, the owner of Clydesdale.

‘This is a landmark day for the bank and puts the total cash paid to the state since its bail-out at almost €10bn’

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