Ireland's AIB sees "very significant" investor IPO appetite

The initial public offering (IPO) will see the government dispose of a 25 per cent stake in the lender.

"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", Noonan said.

Today's decision is a significant step in the continued normalisation of the state's involvement in Ireland's banking system and reaffirms the government's commitment to recovering its investment in AIB for the benefit of the Irish people.

News of the Government's ability to increase the size of the offer came as analysts valued the nationalised lender at between €12bn (£10bn) and €13bn (£11.3bn) - above its book value of €11.3bn but below the €20.8bn (£18bn) injected by the taxpayer.

The government owns 99.9% of AIB and received a dividend of 250m euros last month - its first since the rescue.

The shares will be listed on the Irish Stock Exchange and London Stock Exchange, with the publication of a prospectus and announcement of price range expected in mid-June.

AIB is less exposed to Britain's exit from the European Union than its main rival, Bank of Ireland, the state's largest bank by assets, having made just 14 percent of its pre-provision operating profit in the United Kingdom a year ago.

Noonan has said before that it could be almost a decade before the State sells their final shares in AIB in the hope of fully recouping its bailout bill. In 2015, it made 400 million euros by refloating a quarter of the far smaller permanent tsb on the stock market.

The government will use the funds from the flotation to reduce the national debt by about 1.5%.

Michael Noonan, the finance minister, claimed this morning that the state will eventually make a profit on the 2010 rescue, although he added that it could be 2027 before Ireland recoups more than its original investment.

Bank of America Merrill Lynch, Davy and Deutsche Bank are global co-ordinators, Citigroup, Goldman Sachs, JP Morgan and UBS bookrunners.

  • Zachary Reyes