DUBLIN (Reuters) -AIB’s board will decide over the coming week whether a proposed direct share buyback from the Irish state should proceed after it was approved by shareholders on Thursday amid a drop in its share price since the plan was announced on March 5.
AIB announced the 1.2-billion-euro ($1.4 billion) buyback with the Irish government, a 12% shareholder, in early March as part of a boost to shareholder returns.
However, its share price has since fallen below the minimum price set for the buyback of 6.26 euros apiece due to a global stock market rout unleashed by U.S. President Donald Trump’s tariffs.
AIB shares were 0.8% lower at 5.92 euros at 1320 GMT, up from a low of 5.16 euros on April 9 but well below the 7 euros they touched on March 5.
Shareholders approved the buyback proposal at AIB’S annual general meeting on Thursday, with 97% voting in favour. The bank’s board has until May 8 to decide whether the plan is in the bank’s best interests, AIB said in a trading update.
“We’re obviously dealing with a high degree of uncertainty externally and quite volatile market conditions, but let’s wait and see what happens over the coming days,” AIB CEO Colin Hunt told reporters after the meeting.
The government agreed in principle to the buyback proposal a month ago and said it could cut its shareholding in the bank to around 3% from 12% currently as it aims to exit the bank entirely this year.
A shelving of the buyback would delay the exit from a bank it effectively nationalised in 2010 when it pumped in 21 billion euros ($22.7 billion) following a banking crash. The lower share price may also slow a separate gradual selling of shares.
AIB on Thursday reiterated its full-year guidance provided in March. It said its first-quarter net interest income had fallen in line with expectations and its core tier 1 capital ratio grew strongly to 16.8% from 15.1% three months earlier.
($1 = 0.8844 euros)
(Reporting by Padraic Halpin and Conor Humphries. Editing by Emelia Sithole-Matarise and Mark Potter)
