Officials told the Finance Minister that recovery of the full €29 billion the state used to bail out the banks should not be the “over-riding consideration” as the Exchequer looked to sell off more of its stake in AIB.
Ahead of the latest share sale of the bank earlier this month, a submission for Minister for Finance Michael McGrath said the state had now been a shareholder in AIB for thirteen years and that it was key to keep reducing its exposure.
A pre-sale submission said: “Our advice for many years has been to gradually reduce our investment in the banks at sensible prices such that we can recover as much of the [circa] €29 billion we put into AIB, BOI and PTSB as possible.
“Full recovery of the €29 billion or what we put into AIB should not be the over-riding consideration that drives our decision making. Bank shares are risky and volatile and the State has already been a shareholder in AIB since 2010.”
Minister McGrath was told that “political conversations” about another sale should take place but that as long as these did not include a specific date, they were not considered sharing “inside information”.
“Therefore (if required) we recommend that you seek political clearance in the coming days, and ideally before AIB’s trading statement on November 1st, giving you the ultimate decision and authority to execute a transaction based on our advice and market conditions,” said the document.
A post-sale submission on what was tagged Project Viking VI said the latest sale had yielded €515 million and had reduced the state’s shareholding in the bank to 40.8 per cent.