Ireland has sold its remaining shares in AIB Group, marking the end of state ownership in the country's second-largest lender 15 years after the banking crisis that required massive government intervention.

The finance ministry announced on Tuesday that it sold its final 2.06 per cent stake in AIB for €305.3 million, bringing the total amount recovered by the state from its investment in the bank to approximately €19.8 billion. This falls just short of the €20.8 billion that was pumped into AIB during the crisis.

The sale represents a significant milestone in Ireland's recovery from the 2008 financial crisis, when the government was forced to inject €64 billion - nearly 40 per cent of the country's annual economic output at the time - into its banking sector following a devastating property crash.

"This is an important milestone in delivering on the government's policy of returning the banking sector to private ownership," said finance minister Paschal Donohoe.

AIB chief executive officer Colin Hunt acknowledged the bank's troubled past, stating: "AIB profoundly regrets that the institution had to be rescued by the state almost two decades ago and owes an immense debt of gratitude to Irish taxpayers for the support provided during that challenging time."

Overall, the state is approximately €600 million above break-even on its €29.4 billion combined investment in AIB, Bank of Ireland, and Permanent TSB. This positive outcome was largely due to the successful disposal of Bank of Ireland shares, which returned €6.7 billion from an initial €4.7 billion investment.

Ireland retains a 57 per cent stake in Permanent TSB, the smallest of the three banks that required state support. The government has concentrated on selling shares in the larger, more profitable institutions first.

The banking sector bailout came with conditions including a €500,000 cap on executive pay, which remains in place for AIB and Permanent TSB. Bank of Ireland had this restriction removed after returning to full private ownership in 2022.

The government plans to use proceeds from recent bank share sales as part of a major infrastructure investment programme, with €3 billion from AIB sales earmarked for such projects last year.

---