Rising bank share prices suggest Ireland may get the kind of value required to sell a 25% stake in state-owned Allied Irish Banks (AIB) this year, Finance Minister Michael Noonan said on Tuesday.
Last year Ireland pushed back the likely timetable for partially cashing out its 21 billion euro investment to 2017 from 2016, citing unfavourable market conditions. AIB is 99% state-owned.
Noonan reiterated that he was not under any time pressure to kick off an initial public offering (IPO) but noted a recovery in the value of bank shares, which he partly attributed to investors anticipating rising interest rates.
"There has been a recovery in recent months. For example, Bank of Ireland and ptsb (permanent tsb) are now trading well above lows experienced in 2016. Bank of Ireland has appreciated by 52% and ptsb by 81%," Noonan told parliament.
"Certainly there's an indication that we might get the kind of values we would require but there are a number of events that would be necessary before we proceed, the issue of a dividend, obviously that would probably enhance value somewhat and then there's the annual returns of AIB which are due out in March."
Shares in 14% state-owned Bank of Ireland are still almost 40% below their post-financial crisis high reached in 2015 while the smaller, 75% government-owned ptsb is similarly shy of its 2015 IPO price.
AIB, Ireland's second-largest bank by assets, is in discussions with regulators over starting to pay a regular dividend to the state, which its chief financial officer said it believed it was absolutely in a position to do.
Ireland last month appointed Bank of America Merrill Lynch , Deutsche Bank and Davy Stockbrokers as the global coordinators for the potential sale of a stake in the bank.
Asked when he believed an opportune time would come to assess the potential for an IPO, Noonan presented two possibilities for this year.
"There's a window some time from late May through June and then there's another window in the autumn. So one or the other," he said. (Reuters)
Source: www.businessworld.ie
