AIB slumps 15% as Noonan urges investors not to buy shares

Minister for Finance Michael Noonan has warned investors not to buy AIB shares at the moment or they will lose money.

Speaking in Limerick at the launch of AIB’s refurbished flagship branch and self service lobby on O’Connell Street, Mr Noonan said shares in the bank are currently overvalued.

“The value attributed to the shares in the stock market at the moment would put a nominal value of €55bn on AIB, it’s not worth that. So the shares are overvalued but it’s because of the restructuring.

“So I am issuing a kind of a warning to investors. Wait until it’s restructured before you buy. If you buy now you will lose money.”

The Minister for Finance also revealed that a plan to restore AIB to the private sector would be announced before Christmas.

“It will be a long process. I am not announcing an imminent sale of AIB or anything like that. I am saying that before very long and certainly before Christmas all interests will come together.

"That's the Department of Finance, AIB and some outside advisors and we will start the process of laying out a blue print which would lead then over quite a significant number of years of restoring the bank to the private sector through a public selling of the shares."

Speaking at the official launch, AIB chief executive David Duffy said the bank has built its model for the future based on customer and its needs.

“We have done enough damage and we will always admit that, in the past. The only way we will be successful in the long term is if we rebuild that brand, and the only way you can do that is by addressing your customers in the way they want to be addressed.”

Mr Duffy announced that AIB has approved €292 milion in business credit to Limerick and the mid west region in the year to 2014.

He said loan draw downs by SMEs in the Mid West region were up 24 per cent in the first nine months of 2014 compared to the same period last year.

Referring to the troika, which is back in Dublin, Mr Duffy quipped:

“The troika are back to today I see. It’s like Nightmare on Elm Street, like Freddy who keeps coming back. At the same time I do understand why they are here.”

He added that it is nice to be in a position to be able to tell the troika that while it may not have had confidence in us “we have succeeded in bringing the business back.”