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Irish government to float Allied Irish Banks in Dublin and London

Published: 03:17 31 May 2017 EDT

Ireland
The Irish government paid €21bn to bail out AIB during the height of the financial crisis

The Irish government has confirmed it will launch an initial public offering (IPO) of state-owned Allied Irish Banks (AIB) in what could be one of the UK’s largest listings in the past 20 years.

The government, which spent €21bn in its bailout of AIB during the height of the financial crisis in 2010, said in a statement that it would sell about 25% of its stake in the lender in the IPO on the main Irish and London stock markets.

The Irish state currently owns about a 99.9% holding in AIB.

The IPO is expected to value the bank at €12bn, well below the amount the government invested in its rescue deal, according to EY's valuation of the lender at the end of 2016.

Ireland’s department of finance said the IPO’s price range and prospectus are expected by mid-June.

“The government’s long-held policy is that the state should exit its banking investments in a measured and prudent manner, returning ownership to the private sector over time,” finance minister Michael Noonan said.

“The strong progress made by AIB and current market conditions mean that now is the right time to commence that process.”

The IPO will be available to institutional and retail investors, with a minimum application of €10,000 per investor, and proceeds will be received by the Irish government.

The government’s decision to begin selling its stake comes as the bank has shown recovery by posting an annual pre-tax profit for the past three years and reducing its non-performing loans from 35% of total loan book in 2013 to 13% of total loans currently.

Former AIB boss David Duffy, who left the bank in early 2015 to join challenger bank Clydesdale, led most of the bank’s turnaround. 

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