The Department of Finance has taken its latest step in the process of returning AIB to private ownership by appointing three companies to assist with a potential future flotation of the bank’s shares.
Michael Noonan said there was still no fixed timetable for the sale of AIB
Bank of America Merrill Lynch, the US banking giant; Davy, Ireland’s largest stockbroker; and Deutsche Bank, the German-headquartered bank, have been appointed as global co-ordinators to advise on a potential initial public offering (IPO) of shares.
Michael Noonan, the finance minister, said: “The appointment of these global co-ordinators is an important step in preparations for the future sale of part of the state’s shareholding in AIB. These three firms will work alongside the Department of Finance and AIB to prepare for a potential IPO and ensure a successful outcome for the state.
“There remains no fixed timetable for any sale at this time as it will depend on market conditions among other things. These appointments will ensure that the state has the option to sell some of the state’s shareholding in AIB during 2017 or indeed early 2018 as provided for in the programme for government.”
The finance minister initially intended to sell a 25 per cent stake in AIB last November but postponed doing so, citing unfavourable market conditions.
The timeframe outlined by Mr Noonan yesterday is in line with the likely flotation date reported by The Times in October.
Market sources indicated that it would be the second half at the earliest before the planned sale would go ahead.
The government pumped €20.9 billion into AIB between 2009 and 2011, when it took a 99.8 per cent stake.
Richard Pym, the bank’s chairman, has said that the government will recoup the investment.
The department advertised the global co-ordinator roles in mid-November and said at the time that it expected to be able to announce the successful candidates early next year.
The three companies, which the department described as having “significant knowledge and expertise” of large-scale transactions in Ireland and across Europe, have been appointed for a period of 18 months.
The department, along with its independent financial advisor, Rothschild & Co, one of the world’s largest financial advisory firms, and AIB, will work closely with the global co-ordinators to continue preparations for a future sale.
AIB is advised by Morgan Stanley, the bank, and Goodbody, the stockbrokers.
A range of increased regulatory costs and new capital requirements have impacted upon the attractiveness of bank stocks generally while analysts believe legislation proposed by Fianna Fail to give the Central Bank of Ireland power to cap mortgage interest rates could also dent AIB’s appeal to investors.