Irish government to begin phased exit from Bank of Ireland holding

Finance Minister Paschal Donohoe said that the Ireland’s government will begin to sell down part of its 13.9% shareholding in Bank of Ireland. This is over the next six months, marking the state’s first sale of any bank shares since 2017.

Ireland pumped almost 40% of its annual economic output into its banks a decade ago. This is after a property crash had left its now mostly state-owned banking sector requiring the biggest state rescue in the euro zone. Bank of Ireland was the only lender to avoid majority state ownership. The government has already recouped more than the 4.7 billion euros it originally invested in the bank. Donohoe said that the announcement marked the start of a phased exit from the country’s largest bank by assets.

Ireland’s finance ministry said that to manage the sale Citigroup is appointed and instructed to target that up to, but no more than, 15% of expected aggregate total trading volume in the bank be sold over the duration of the trading plan. The state’s shareholding is worth close to 700 million euros. The ministry said that it will not be sold below a certain undisclosed price per share and will be kept in view. The shares of Bank of Ireland are up 31% so far this year. In the coming days, the government’s trading plan will become operational and it can be renewed at the minister’s discretion after six months.

Donohoe acknowledged that following the planned exit of Britain’s Natwest and Belgium’s KBC from the Irish market, the competitive dynamic for Bank of Ireland had completely changed. And that this would be a factor in the sale. He added that it was still possible that the state could make a profit through the sale of its holdings in the banks that are still trading.