AIB is to be restored to the private sector and the process to do that will begin with blueprint announcements before Christmas according to the Minister for Finance.
Michael Moonan was in Limerick this week at the launch of the newly refurbished self service lobby at the O’Connell Street branch and while he said that the bank was effectively over-valued due to the current share price structure, he advised investors to wait until the restructuring process was complete because “if you buy now you will lose money.
“The value attributed to the shares in the stock market at the moment would put a nominal value of €55bn on AIB, it’s not worth that. So the shares are overvalued but it’s because of the restructuring.
“So I am issuing a kind of a warning to investors. Wait until it’s restructured before you buy. If you buy now you will lose money.”
Regarding the plan to privatise the bank, Minister Noonan said that “It will be a long process. I am not announcing an imminent sale of AIB or anything like that. I am saying that before very long and certainly before Christmas all interests will come together.
AIB chief executive David Duffy admitted the bank has had a turbulent past but said they have built its model for the future based on customer and its needs.
“We have done enough damage and we will always admit that, in the past. The only way we will be successful in the long term is if we rebuild that brand, and the only way you can do that is by addressing your customers in the way they want to be addressed.”
Mr Duffy announced that AIB has approved €292 in business credit to Limerick and the mid west region in the year to 2014.
He said loan draw downs by SME’s in the Mid West region were up 24 per cent in the first nine months of 2014 compared to the same period last year.
Referring to the Troika who are back in Dublin Mr Duffy quipped:
“The Troika are back to today I see. It’s like Nightmare on Elm Street like Freddy who keeps coming back. At the same time I do understand why they are here.”
He added that it is nice to be in a position to be able to tell the Troika that while it may not have had confidence in us “we have succeeded in bringing the business back” and added that “the only we will be successful in the long term is if we rebuild that brand.”.
Mr Duffy said that he has been in the role for the last three years and overseen the bank’s “sovereign obligation through lending”.
Over €9bn has been lent to customers and that is a 39 per cent increase which he said represents a “real stimulus in the economy”.
“There has been a stabilisation in the economy across the board and in the last “six to nine months, there has been a definite shift in the economy and all is pointing in the right direction”.
Mr Duffy said that consumer spend and confidence is up and that it has been aided by Government “who can help provide that confidence.”
See the two videos of Minister Noonan’s comments on AIB