- Key Insight: In the 15 years since Allied Irish Banks nearly collapsed, both the bank and its home country have achieved a remarkable turnaround.
- Supporting Data: In the first half of 2025, AIB's Common Equity Tier 1 capital ratio was 16.4%, well above regulatory requirements.
- Expert Quote: "We're now entering a new era where we're not looking over our shoulder anymore," said AIB CEO Colin Hunt.
In 2010, Allied Irish Banks was on the verge of collapse. Its share price had plummeted to 0.32 euros — down from almost 24 euros in 2007 — and at the end of the year the bank recorded a loss of more than 10 billion euros.
"The bank was effectively broken," AIB's current CEO, Colin Hunt, told American Banker during a recent visit to New York. "I'd describe it as being broken financially and spiritually. Its confidence was absolutely shot."
To save one of the pillars of its economy, the Irish government bought up the vast majority of AIB's stock, effectively nationalizing the bank.
But this was not an American-style bailout. In the United States, the federal government was quick to sell its stock in the banks it rescued — for example, after
During that time, AIB transformed. Now a fully private bank once again, its balance sheet is leaner and more focused, its capital ratio is above-target and as the Irish economy continues to prosper, analysts say AIB is well positioned for growth.
"We'd be very constructive on AIB and its peers right now," said Diarmaid Sheridan, senior director of research at the Irish financial firm Davy Group. "The amount of capital it generates today is very, very attractive."
What happened between then and now? Analysts say the story has as much to do with the Irish economy as with AIB itself. As Ireland recovered from the financial crisis, so did AIB. But the bank also made key decisions and sacrifices that cleared the way for a comeback.
"Over the past 15 years, we've been focused very much on repairing the institution, repairing the balance sheet, repairing the loan book, rebuilding trust in the organization, rebuilding profitability — which we have done fairly well," Hunt said.
A global crisis
Back in the late 2000s, much like the U.S., Ireland suffered from a massive housing bubble. From 1992 to 2006, the price of a newly constructed house in Ireland rose by 340%, according to the
"You have this huge property bubble driven by deregulation, driven by a lot of foreign capital coming into Ireland, driven by economic growth," said Sean Vanatta, a senior lecturer of financial history at the University of Glasgow. "And so when the bubble bursts, all the Irish banks are in trouble."
Then came the bailout. Ireland's government began buying up AIB stock in 2009 and eventually held a 99.9% stake in the company.
At the same time, the government also nationalized the rest of the country's "Big Four" banks, two of which — Anglo Irish Bank and Irish Nationwide Building Society — were liquidated just a few years later. It was far from certain that AIB would survive.
Trimming the fat
At the time of the bailout, AIB still had a significant international presence, including in Poland and several countries in the Baltics. It also owned a
But in order to raise desperately needed capital, the bank was forced to relinquish most of that global footprint. AIB sold its Polish business and the M&T stock by the end of 2010, and eventually all that was left were its operations in Ireland, Great Britain and a small presence in the United States.
This proved to be just the beginning of a yearslong streamlining process. Bringing AIB back to financial health, it turned out, required shedding almost all of its business, except for its absolutely core operations — and even then, there was more work to be done.
"Even after all the disposal of international businesses, even after we had disposed of our own asset management arm and our stock-broking arm and all our activities that were regarded as non-core, we still ended up with a very badly impaired balance sheet," Hunt said.
In 2010,
"They had an enormous task to undertake," Sheridan said. "It has been a huge, multi-year focus to do that."
Turning the corner
The hard work began to pay off in 2014, when AIB turned its first profit since the crisis. That year, the bank took in net income of
Three years later, AIB returned to the stock market. At an initial public offering in June 2017, the Irish government offered a roughly 28% stake in AIB, and investors responded by pouring 3 billion euros into the bank.
The process of reprivatizing AIB had begun — but then it paused. A confluence of world events, including low interest rates in Europe and Britain's long, messy divorce from the European Union, put a damper on investor appetite. Then, to top it off, the COVID-19 pandemic arrived.
"The market to be able to dispose of the stake just wasn't conducive," Sheridan said.
If the seller had been a private-sector company, the process might have unfolded faster. But the Irish government had time on its side. As the years went by, Ireland's housing market recovered — from 2013 to 2023, housing prices
"What the government has the advantage of is: It's forever," Vanatta said. "It has a much longer time horizon, and it can afford to wait until the market recovers."
From 2022 onward, AIB continued to privatize through a combination of stock buybacks and offerings to investors. And in June 2025, the government finally sold off the last of its stake.
"It marked the end of the crisis and recovery chapter for the bank," Hunt said. "We're now entering a new era where we're not looking over our shoulder anymore."
Earlier this month, Hunt crossed the Atlantic to attend a conference hosted by Barclays in New York, where he checked in with some of AIB's biggest U.S. shareholders.
For any potential new investors, Hunt said, AIB has a strong pitch: Both the bank, and the country have bounced back. In the
Meanwhile, Ireland's economy is humming. In 2024, the nation's
"There's been a 180-degree pivot to where we found ourselves pre-crisis," Hunt said. "It's a good story."
