The state has sold 134 million shares from its holding in AIB to raise gross proceeds of €305m.

The placing with institutional buyers was effected at a price of 228c per share.

The sell-off of 5% of the total state holding in AIB reduces the number of AIB shares owned by the state from c.1,830 million to c.1,700  million, representing c.63.5% of the ordinary share capital.

The disposal proceeds will be returned by the Ireland Strategic Investment Fund to the Exchequer.

The Minister for Finance has undertaken not to sell further shares in the company for a period of 90 days.

In Association with

ISIF was advised on the transaction by Rothschild & Co, with William Fry and Allen & Overy providing legal counsel.

Colin Hunt (pictured), AIB Group chief executive, commented: “We very much welcome the decision and subsequent transaction undertaken by the Minister for Finance, which has led to a further divestment of the state’s shareholding in AIB Group plc.

“It is an important development in the process of returning the state’s investment in the group and a normalisation of the share register. AIB owes the Irish taxpayer an immense debt of gratitude for its support during the financial crisis.

"We remain focused on our strategy to grow and strengthen the group to ensure we continue generating sustainable returns for all our shareholders.”