DUBLIN (Reuters) -AIB’s board will decide whether a proposed direct share buyback through the Irish state is in its best interests if it is approved by shareholders on Thursday following 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 following a better than expected jump in full-year profit.
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 in early trading on Thursday, up from a low of 5.16 euros on April 9 but well below the 7 euros it touched on March 5.
Shareholders will vote on the buyback proposal at the bank’s annual general meeting later on Thursday. The bank’s board has until May 8 to decide whether to proceed with the plan, AIB said in a trading update.
“I’m not going to preempt the decision of shareholders… We are dealing with a volatile market backdrop and let’s wait and see what ensues,” AIB CEO Colin Hunt added in an interview with Bloomberg when asked if it was the right time to buy the stock back.
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.
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; Editing by Emelia Sithole-Matarise)
