AIB proceeds with buyback to cut Government stake

AIB has agreed to proceed with a direct share buyback with the State as its share price rose back above the agreed buyback price, allowing it to cut the Government’s stake in the bank to 3.3% from just under 12%.

The buyback was approved by AIB’s shareholders at its AGM last week.

AIB first announced the €1.2 billion buyback in early March at an agreed price of €6.26 a share but the plan was thrown into doubt when its share price fell as low as €5.16 on April 9 amid a global stock market rout unleashed by US President Donald Trump’s tariffs.

AIB’s share price closed at €6.20 yesterday, up from €5.92 last Thursday when 97% of shareholders approved the proposal and AIB said its board would decide whether proceeding was in the bank’s best interests.

The shares rose a further 1.4% to €6.28, above the buyback price, after the bank announced it would proceed. The buyback is expected to settle on Friday, the bank said.

Finance Minister Paschal Donohoe said the Government, now no longer the largest shareholder in AIB, had a clear path to exit the bank completely over the coming months by gradually selling down its remaining shares.

The State pumped €21 billion into AIB following a banking crash in 2010. Mr Donohoe said the total return from its investment in AIB will reach €19.2 billion after the buyback with its remaining stake currently worth around €500m.

AIB has also commenced preliminary discussions on buying back warrants the Government owns in the bank, Mr Donohoe added.

Colin Hunt, AIB’s chief executive, said the bank was very pleased to make a payment of an additional €1.2 billion to the State through the buyback of a further tranche of AIB shares.

“This agreement with the Minister for Finance follows a €500m directed buyback in September 2024 and a €1 billion directed buyback in May 2024,” the CEO said.

“Today’s development represents another important milestone in the process of repaying the taxpayer for their support, the normalisation of the group’s share register and enhancing liquidity in AIB shares,” he said.

“After reporting a strong performance in the first quarter, we are building great momentum in our business, supporting our 3.35 million customers, the Irish economy, and delivering significant shareholder returns,” he added.

The Minister for Finance Paschal Donohoe said the completion of this latest share buyback transaction with AIB is a very important step for both the company and the State as it results in the State’s shareholding in AIB reducing to 3.3% while recovering a further €1.2 billion from its investment in the bank.

“When combined with the latest annual dividend of about €100m to be received on Friday, the total amount returned to the State from our investment in AIB will reach €19.2 billion with our remaining shareholding currently worth approximately €500m,” he said.

The proceeds from this transaction will be held within the Irish Strategic Investment Fund and will ultimately be used to benefit the State, he added.

AIB shares moved higher in Dublin trade today.