Ireland to cut AIB stake to 41% in latest share sale

DUBLIN, Nov 6 (Reuters) - The Irish government received more than enough demand to cover the sale of a further 5% stake in AIB Group (AIBG.I) by way of a placing to institutional investors that will cut its stake in the bank to just under 41%, one of the joint bookrunners said.

The country's finance ministry said on Monday it planned to sell 131 million shares in an accelerated placement, reducing its stake in one of Ireland's two remaining partly state-owned lenders to 40.8% from about 45.8%.

Dublin began selling shares in AIB for the first time since a 2017 IPO just under two years ago and in June cut its stake to below 50% for the first time since effectively nationalising the bank more than a decade ago.

Ireland pumped 64 billion euros ($68.70 billion), or almost 40% of its then annual economic output, into the country's banks after a huge property crash in the late 2000s. It sold its last shares in AIB's main rival, Bank of Ireland (BIRG.I), last year.

Profits at AIB, Bank of Ireland and the third surviving bank, majority state-owned PTSB (PTSB.I), have all shot up in the last year due to higher interest rates and the decisions by KBC (KBC.BR) and NatWest (NWG.L) to shut their Irish businesses.

AIB last week lifted its full-year income guidance for the third time this year and said it would outline in detail next March how it plans to return excess capital to shareholders, including by possibly buying back more shares directly from the state to further cut the government's holding.

AIB's share price has almost doubled since the government announced the gradual selldown of its stake in late 2021.

($1 = 0.9316 euros)

Reporting by Padraic Halpin in Dulin and Anchal Rana in Bengaluru; Editing by Shailesh Kuber and Barbara Lewis

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