Normalisation of the relationship between the State and the domestic banking system
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From: Department of Finance
- Published on: 17 June 2025
- Last updated on: 17 June 2025
As announced earlier today, the State has completed the final sell down of its shareholding in AIB and no longer has a shareholding in that bank. This follows the State exiting its Bank of Ireland shareholding in September 2022. The State retains a 57.4% shareholding in PTSB, and we will continue to assess opportunities for disposal of the State’s stake in that bank as they arise.
A total of €29.4bn was invested in AIB, Bank of Ireland and PTSB over the period 2009 to 2011. To date, c. €29.4bn has been recovered in cash by way of disposals, investment income and liability guarantee fees. The remaining investment in PTSB is currently valued at c. €0.6bn leaving a surplus of c. €0.6bn. This excludes the value of the AIB IPO Warrants held by the Minister.
Commenting today, the Minister for Finance, Paschal Donohoe T.D. said:
“Recognising that the State has significantly divested from its bank shareholdings, and in line with the Programme for Government commitment to complete the task of normalising the domestic banking system, I am announcing a further normalisation of the relationship between the State and the domestic banking system. This means the removal of certain crisis-era measures which continue to be in place today, including certain restrictions pertaining to remuneration.
These restrictions were introduced by way of contract with the banks recapitalised by the State following the financial crisis. When introduced, these contractual restrictions had no expiry date or sunset clause.
Following the 2022 Retail Banking Review, changes to remuneration restrictions were made for all three banks to allow for variable pay of up to €20,000 per employee per annum. This is consistent with the limit set by the 89% super-tax, which remains in place. The change also allowed for the provision of standard non-pay benefits for all employees.
The maximum pay cap of €500,000 for an individual was removed for Bank of Ireland at that time but retained for AIB and PTSB. This maximum pay cap will now also be removed for both AIB and PTSB. This ensures a level playing field between Bank of Ireland and AIB which is consistent with the shareholding position. Removing the salary cap for PTSB at this juncture is to ensure that it is not put at a competitive disadvantage.”
ENDS