AIB, which is 99.8 per cent State-owned, is likely to pay a €285 million dividend in the coming months, according to analysts at its corporate broker Goodbody Stockbrokers.
This comes as it prepares for the Government to sell down its stake in the bank. On that basis, tens of thousands of small shareholders and institutional investors that remained on board following the bank’s €20.8 billion bailout at the height of the crisis are set to share about €570,000 between them.
"Our estimates incorporate a circa €285 million ordinary dividend from AIB for full year 2016, which would likely supplement its potential income credentials," said Eamonn Hughes, an analyst at Goodbody Stockbrokers, noting that this would equate to a payout ratio of 40 per cent of net income.
Crisis
In November, Ulster Bank became the first major Irish-based retail lender to pay a dividend since the onset of the financial crisis in 2008, as it handed over €1.5 billion to its parent, Royal Bank of Scotland. Bank of Ireland has also signalled its hope of returning to paying a dividend this year, on 2016 earnings, while KBC Bank Ireland's chief executive Wim Verbraeken has said the company is preparing to restart dividends to its Brussels-based parent as soon as this year.
Goodbody Stockbrokers' comments on AIB's potential dividend amount come after Minister for Finance Michael Noonan said in the Dáil on Tuesday evening that restarting shareholder payouts would be a key milestone before the Government started selling its stake. Mr Noonan said that a share sale could take place as early as May or June, but also possibly in the autumn.
Mr Noonan said that his advice was that an initial public offering (IPO) was the “optimal route” to the State recouping its €20.8 billion bailout of the bank.
Goodbody Stockbrokers and Morgan Stanley are advising AIB as it prepares to return to the main market, while the Department of Finance tapped Bank of America Merrill Lynch, Davy and Deutsche Bank last month to assist it with the process.
