AIB valued at €12bn as Ireland floats rescued bank

Allied Irish Banks has raised €3bn (£2.6bn) for Ireland in a stock market float that valued the once-stricken lender at €12bn and marked one of the biggest listings in London in recent years.

The lender sold a 25pc stake to investors priced at €4.40-a-share in a deal that has been hailed as a milestone for the country’s recovery from the financial crisis and an important test of investor appetite for Irish banking stocks. The shares, which are also listed in Dublin, jumped more than 7pc on the Irish exchange in early trade.

AIB was bailed-out to the tune of €20.8bn in 2010, handing the government a 99.9pc stake, as Ireland’s banking system teetered on the brink of collapse following the nation’s property crash. Ireland itself was forced into a €67.5bn EU rescue because it could not afford to prop up its banks without help from Brussels.

Including the €6.8bn that has already been returned to the Irish government through coupons, dividends, the redemption of preference shares and bonds, and fees, the float means the taxpayer has now recouped nearly half the cost of the AIB rescue.

“This is a landmark day for the bank and puts the total cash paid to the state since its bailout to almost €10bn,” said Bernard Byrne, AIB’s chief executive. “The level of investor interest and support for AIB and Ireland is a great vote of confidence in the strength of the turnaround in the bank and the wider economy.