From Bailout to Private: AIB's Remarkable Comeback!

Allied Irish Banks (AIB) has officially transitioned back to full private ownership, marking a significant milestone 15 years after requiring a government bailout. The move comes after AIB was effectively nationalised in 2010, during a time when Ireland faced a devastating banking and property crisis. This week, the government announced the sale of its final 2% shareholding in AIB for just over €300 million (£255 million).

In a statement, AIB’s chief executive, Colin Hunt, expressed gratitude towards Irish taxpayers, acknowledging the support that allowed the bank to recover. He stated that AIB ”profoundly regrets” its earlier dependency on state rescue nearly two decades prior. The Irish banking sector experienced turmoil in the 2000s, resulting from a catastrophic property price crash and an international financial crisis, leaving banks struggling to secure funding.

At the height of the crisis, the Irish government controversially guaranteed the banks’ liabilities, leading to massive taxpayer-funded bailouts. By 2021, the government had begun to reduce its shareholding from 71%, and Finance Minister Paschal Donohoe highlighted the completion of this process as a crucial step in the government’s policy to return the banking sector to private hands.

Bank of Ireland had previously reverted to private ownership three years ago, while the government still maintains a majority stake in PTSB. Donohoe revealed that the state achieved an effective profit of €600 million (£511 million) from its €29.4 billion (£25 million) bailouts across AIB, Bank of Ireland, and PTSB. However, the collapse of other banking institutions, such as Irish Nationwide Building Society and Anglo Irish Bank, cost taxpayers around €35 billion (£29.8 million). This return to private ownership underscores the recovery and stabilization efforts within Ireland’s banking landscape.