Allied Irish Banks (AIB) recently became fully privately-owned again. This milestone comes exactly 15 years after the sometimes troubled institution required a federal government bailout. The Irish government today sold its last 2% stake in AIB for a little over €300m (£255m). This sale completes a long process that began by nationalizing the bank in the depths of the Irish banking and property crisis in 2010.
Just as it did when AIB faced nationalization the brunt of a financial calamity in the 2000s. Like the previous crisis, this crisis threatened to unravel the entire banking sector. In 2010, AIB was still reeling from a property price crash and an international financial crisis. The bank required a massive taxpayer-funded bailout, part of a total bill of over €35 billion (£29.8 million) for multiple institutions.
Colin Hunt, chief executive of AIB extended his personal appreciation. In his speech, he thanked the Irish taxpayers for their essential role in stabilizing the bank at the height of its stormy period. He stated, “Allied Irish Banks owes an immense debt of gratitude to Irish taxpayers.” Hunt reflected on the bank’s history, adding that AIB “profoundly regrets that the institution had to be rescued by the state almost two decades ago.”
The Irish government’s Finance Minister, Paschal Donohoe, emphasized the importance of this development, stating that the completion of AIB’s return to private ownership is “an important milestone in delivering on the government’s policy of returning the banking sector to private ownership.” Donohoe described how the state turned a healthy profit of €600 million (£511 million). This profit was stemming from its original €29.4 billion (£25 million) bailouts to multiple banks, including AIB, Bank of Ireland, and PTSB.
As far back as 2018, the government began an active divestment from AIB. They started to liquidate their large 71% ownership of the bank. This comprehensive move was critical in returning political and economic confidence to Ireland’s banking sector. Second, it wanted to remove the state from direct participation in private businesses.
AIB’s new chapter as a completely private entity poses both challenges and opportunities. This transition is a remarkable turnaround from one of the darkest episodes in recent Irish economic history. Everyone in the banking world is ready to use what we learned from the last failures. We recognize that this transition will lead to a more resilient financial landscape, and they’re right.
