In a vote taken at its annual general meeting at AIB’s headquarters on Molesworth Street, 97.24pc of shareholders voted in favour of the buyback deal.
The scheme will allow AIB buy 1901.6 million shares from the Department of Finance, and would mean the State’s shareholding would drop from almost 12pc to about 4pc.
Chief executive Colin Hunt said he and the government wanted to get the share-buyback scheme over the line, but shareholders had to have their say.
The buyback must take place at a price higher than €6.26 or the average share price in the five-day run-up to the agm. There was some doubt as to whether shareholders would give their approval, as the bank’s share price has dropped substantially from a high of €7 in March.
The minimum price condition was set on March 31, before stock market prices collapsed following US president Donald Trump’s unveiling of “reciprocal” tariffs.
AIB’s shares subsequently fell to as low as €5.16. They have recovered since then, and were trading at about €5.90 today on Euronext in Dublin. The five-day average prior to today’s agm would be about €5.83 per share.
“Our first step has been to get approval from the Central Bank and then we will have to get approval from the shareholders,” Mr Hunt said. It is understood that the approval from the regulator lasts for 12 months, which allows the AIB some room to manoeuvre
The final decision, even with shareholder approval, lies with the company board, which Mr Hunt said will be seeking advice from its corporate advisors “on fairness of opinion”. It has until next Thursday to decide.
The buyback, reducing the State’s shareholding to an almost nominal amount, brings closer a symbolic bookending of the recovery from the financial crash. The State became an important player in the financial sector after it was forced to bail out several banks in 2009. The bailout of AIB cost about €20 billion.
AIB’s net interest income fell by 8pc in the first quarter mainly due to lower rates, as the European Central Bank continued to ease monetary policy.
In a trading update ahead of its agm, the bank said that the fall in net interest income to €0.95bn, down from €1.04bn in the same quarter last year, was partially offset by an increase in average loan volumes.
AIB said its full year guidance for net interest income had assumed an ECB deposit rate of 2pc from June onwards. “We note the lower rate outlook and the current market expectation for an ECB deposit rate of 1.75pc at December 2025,” the trading update said.
It still expects net interest income for the year to be greater than €3.6bn. Last year the figure was €4.12bn, but the ECB has cut interest rates several times since.
AIB held 34pc of the Irish mortgage market in March. It said “green mortgages” accounted for 54pc of the total.
Gross loans grew to €71.4bn in the first quarter, and new lending increased by 14pc to €3.2bn. AIB says it expects customer loans to grow by about 5pc this year.
“Personal lending in Ireland was up 7pc reflecting our larger customer base and an increase in consumer credit demand, supported by our market-leading digital proposition with 86pc of personal loan applications completed online,” the trading update said.
“New lending to SMEs in Ireland remained relatively stable and in line with Q1 2024 with more than 60pc of small business loans originated on our new online business loan platform.”
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