May 30, 2017 / 7:47 PM / a year ago

Ireland launches long-awaited AIB listing with 25 pct stake sale

DUBLIN, May 30 (Reuters) - Ireland launched its long-awaited initial public offering of state-owned Allied Irish Banks (AIB) on Tuesday, offering a 25 percent stake in what is set to be one of Europe's largest bank listings since the 2008 financial crisis.

Dublin rescued the bank in a 21 billion euro ($23.50 billion) taxpayer bailout which began in early 2009 and has been considering partly cashing out of its 99.9 percent stake since last year.

A successful flotation would mark another milestone in a dramatic turnaround from a banking and fiscal crisis that wrecked the country's economy a decade ago. The sale could raise about 3 billion euros taking into account the bank's book value of 11.3 billion euros at the end of last year.

The bank's value has likely risen since then following another quarter of margin growth, its payment of a 250 million euro dividend this month and a further 11 percent uplift in the value of euro zone banks since the start of the year.

One of Ireland's two dominant banks, AIB returned to profit three years ago, has cut its huge stock of impaired loans by more than two-thirds since then and this year became the first domestic-owned lender to restart dividends since the crash.

"The strong progress made by AIB and current market conditions mean that now is the right time to commence this process," Finance Minister Michael Noonan said in a statement announcing its intention to float.

"Today's decision is a significant step in the continued normalisation of the state's involvement in Ireland's banking system."

AIB will list its shares on the Irish and London Stock Exchange and seek admission to the main markets of each. The government said the sale was expected to be one of the United Kingdom's largest main market IPOs of the last 20 years.

AIB management have said they have received "huge interest in the Irish story" from investors in recent months, pitching the bank as a rare stock market play focused almost exclusively on the European Union's fastest growing economy.

AIB is less exposed to Britain's exit from the EU 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 last year.

It is also the largest provider of mortgages in the fast-recovering Irish market, with a 36 percent share of the market by drawdowns, although investors may be wary of a chronic lack of housing supply that could hold the market back.

The prospectus and price range for the sale are expected to be published in mid-June, the government said.

Bank of America Merrill Lynch, Davy Stockbrokers and Deutsche Bank are acting as global coordinators for the sale. Citigroup, Goldman Sachs, Goodbody Stockbrokers, JPMorgan and UBS are the bookrunners. ($1 = 0.8936 euros) (Reporting by Padraic Halpin. Editing by Jane Merriman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below