Now is ‘good time’ to trigger AIB flotation – Bernard Byrne

Bank chief says four key elements are in place for a share offering

AIB CEO Bernard Byrne addressing the AIB agm on Thursday.  Photograph: Dara Mac Donaill

AIB CEO Bernard Byrne addressing the AIB agm on Thursday. Photograph: Dara Mac Donaill

 

The chief executive of AIB has said this would be a “good time” for the Government to offer shares in the bank to stock market investors.

Speaking on the fringe of its agm in Dublin on Thursday, Bernard Byrne said four key elements for an initial public offering of the bank’s shares in Dublin and London are currently in place – attractive equity markets, strong performances from both AIB and the Irish economy, and the political will for a transaction.

Minister for Finance Michael Noonan has said the first window of opportunity to float AIB shares would be between mid-May and early July.

“Our bias would be to encourage something to happen in this time frame,” Mr Byrne said. “We’re in good shape should the decision be to push it and the French election result recently was positive from a market perspective. I don’t see anything in the way at this time but ultimately it’s the Minister’s decision.

“We have the four bits aligning at this point in time. They don’t always align and markets are variable. I wouldn’t be saying anything other than it’s a good time [to IPO] given the market.”

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Mr Byrne said AIB met 100 investors from the US, Europe and Asia as part of its recent non-deal roadshows.

‘Standout’

“They are very positive on the Irish economy, they see it as a real standout in the European context, they like the franchise and . . . generally the response is that they are in an ’interested’ position at this point to look at the opportunity [of buying AIB shares].”

The Government plans to sell shares to institutional and retail investors and list the stock on the main markets in Dublin and London. The State currently owns 99.9 per cent of AIB.

Earlier, AIB said new lending in the first quarter of this year rose by 10 per cent while its stock of impaired loans reduced by €500 million.

In a trading update, AIB said it had made a “good start” to the year with strong profit and capital generation against a “favourable economic backdrop”.

Its fully loaded core equity Tier 1 ratio of 16 per cent at the end of March was up 70 basis points on the end of December 2016.

Group new lending drawdowns to March 31st were up by 10 per cent year on year, with an 18 per cent rise recorded in the UK.

Its market share of new mortgage drawdowns in Ireland was 38 per cent in the first two months of 2017.

AIB’s impaired loans further reduced by a further €500 million to €8.6 billion. In 2013, this figure stood at €29 billion.