Government cuts stake in AIB below 40pc as market awaits dividend news

The latest disposal was small and reduced taxpayers’ share of ownership from 40.77pc to 39.38pc. The trade was done on February 29 and announced in a stock market notification.

AIB shares closed at €4.29 each on that day, close to their highest level in 12 months.

The bank’s total market valuation is around €11.5bn, so even a sale of under 1pc of shares is worth close to €100m.

The last time the stake was cut was in November 2023, when the Department of Finance disposed of about 5pc of the issued ordinary capital of AIB at a price of €3.93 a share.

After that deal, Finance Minister Michael McGrath undertook not to sell further shares in the company for 90 days. That restriction has now expired.

More than €13.6bn has been recouped by the State from AIB, but that is still well short of the €21bn cost of its rescue.

The then government was forced to nationalise AIB to prevent its collapse due to huge losses resulting from bad loans during the Celtic Tiger period. Anglo Irish Bank and PTSB were nationalised around the same time.

The Government has been gradually reducing its ownership in the bank in recent years under a trading plan announced in December 2021, when the state stake in the bank stood at 71.12pc.

AIB, led by CEO Colin Hunt, is due to report its financial results for 2023 on Wednesday, when the bank is widely tipped to follow rival Bank of Ireland in announcing the biggest profits since the crash and a distribution for shareholders, which Goodbody Stockbrokers analyst John Cronin has tipped to be “at least €1.4bn”.

The State’s almost 40pc stake means it is in line for more than €500m of that anticipated distribution, which can be made up of dividends or share buybacks and which will be known for sure on Wednesday when the financial results are published. AIB shares closed up on Monday at €4.398 each.