The State’s total investment in AIB amounted to circa.€20.75bn and dates back to 2009 when the Minister for Finance directed the National Pension Reserve Fund (NPRF) to make an investment of €3.5bn in preference shares issued by the bank. Subsequent to this the NPRF was further directed to invest €8.7bn in two tranches (December 2010 and July 2011) while a capital contribution totaling €6.1bn was also made by the NPRF and the Minister.
AIB has made considerable progress since the crisis making a sizeable profit in each of the last three years, reducing its impaired loans from peak by 70% while building up a strong capital base. The reorganisation of the bank's capital at the end of 2015, marked a significant milestone as it modernised the bank’s capital structure and facilitated the consolidation the bank’s shares. It also allowed for the return of €1.7 billion to the State, which was followed by the redemption of the ‘CoCo’ (Contingent Capital) instrument in July of 2016, which returned a further €1.6 billion.
Following the capital reorganisation the State still owns 99.9% of AIB’s Ordinary Shares. The SFAD’s priority is to protect the State’s investment in AIB while planning a phased exit over time that maximises the recovery to the taxpayer. The Minister for Finance has high-level oversight over the direction of the bank, but under the Relationship Framework Agreement in place between the State and the bank, day-to-day management decisions are a matter for the board and management of the organisation.
In December 2016 three investment banks were appointed to act as Global Coordinators on a potential selling syndicate, in preparation for a potential IPO either in 2017 or 2018. Any decision to proceed with a sale will depend on a number of factors most importantly market conditions.