Department of Finance submission warned of possible impact of large tracker fine ahead of sale of state share in AIB

Finance Minister Paschal Donohoe was warned that a hefty fine for AIB over tracker mortgages could represent a “negative surprise” as the state prepared to sell a significant stake in the bank.

Officials explained how two previous attempts to offload a large chunk of AIB had fallen at the final hurdle in November last year and again in March this year after the “war in Ukraine intervened”.

They said that the time was right in June to sell down a major stake in the bank with “high quality investors” ready to make sizable trades for AIB shares.

A submission for Minister Donohoe said there were already half a dozen institutions who had indicated a firm interest in investing around €50 million each in the bank.

It said: “What is noteworthy is that these firms are all high-quality names and all but one are what the industry describes as ‘long only’ i.e. your traditional pension and investment funds as opposed to hedge funds that tend to have a short time horizon.”