Allied Irish Bank has been valued at11.3 bn right ahead of a proposed sell back to the public. Based on the evaluation, the sale of shares may bring in some 3 bn Euros at a minimum, it is expected. 25% of the bank is being sold to the public.
Eight years after the rescue
It has been eight years since the bank was rescued from failure during the financial crisis at a cost of 21 bn Euros to the taxpayers. The crisis has come about after the property market witnessed an unprecedented downward spiral. The bank's bailout was carried out with the help of the International Monetary Fund and the European Union.
According to the Finance Minister, the bank is now well on the way to recovery. Both the bank and the market have stabilized now, making this an ideal opportunity to privatize the institution, he said. Notably, the bank's non- performing assets have been significantly trimmed down with only 1/3rd of them remaining on the books now. The institution turned a profit three years ago and has held steady, since then. For the first time since the turnaround, the bank also paid out a dividend of 250m Euros last month to the majority shareholder, the Irish government.
When the AIB stock is launched on the London and Dublin exchanges, it will be one of the biggest in recent times. Interested investors should look out in mid- June for details about the share price range and the prospectus. Market analysts expect that about 15% of the shares will be open to retail investors and also expect a minimum of 10,000 Euros to be set up for investments. It should be remembered that the Irish economy soared at an impressive 5.2% growth rate last year, far better than all other countries within the Eurozone and this fact makes the bank a viable acquisition for global investors.
The bank also has a huge 35% share in the mortgage market in Ireland, by dint of being the biggest lender in this market. In a flourishing property market, this could be a big advantage to the bank and help it sustain its pace of growth. For investors looking to invest in world economies that have not yet achieved their full growth but are on their way up, this could be a good opportunity.