PTSB is set to be sold to an Austrian banking group in a whopping €1.6billion deal.
The Irish Government agreed to sell its stake of 57.5% in the bank for €931million on Tuesday morning.
Minister for Finance Simon Harris announced the decision to his Cabinet colleagues at around the same time.
The PTSB board is now recommending that its other shareholders accept the deal, which is valued at €2.97 per share.
Earlier on Tuesday, shares in the bank, which has over 3,000 employees, were trading at €3.02.
PTSB was put up for sale by its board last October, years after the financial crisis, which saw taxpayers bail it out for €3.9billion.
The State had recovered about €4billion from fees, dividends and selling shares.
The deal means that the taxpayer will now sell the last of its shareholdings in the Irish banks, after it was forced to rescue the sector during the crisis.
Over recent years, the taxpayer has also sold shares in AIB and Bank of Ireland.
For the new deal, the Government was advised by Rothschilds and Co, while PTSB was advised by Goldman Sachs.
The bank had significantly increased the size of its balance sheet over the past few years, following the acquisition of €6.8billion in loans from Ulster Bank.
PTSB has said that its customers are not impacted by the announcement, and it will continue to support and service them as usual.
The Austrian group, BAWAG, is based in Vienna and has operations in Germany, the Netherlands, Ireland, Switzerland, the UK and the US.
With around four million customers, it primarily focuses on retail banking and lending to small and medium-sized companies.
Simon Harris remarked that the deal represents the most significant development in the Irish retail banking market in over a decade.
He stated: ‘PTSB has made great progress in building a strong competitive franchise in the market and BAWAG’s demonstrated deep knowledge of the European and Irish banking sector can propel PTSB to an even more competitive position in the market, with the benefits of this to be seen by Irish consumers, businesses and the Irish economy more generally.’
Harris said that the sale of the State’s investment in PTSB is in line with the objectives of recovering taxpayer funds from the financial crisis.
He added: ‘At a price of €2.97 per share, the transaction will generate about €931million for the State upon settlement. Through a combination of fees, dividend income, the bank levy and disposal proceeds the State has recovered about €4billion from its investment in PTSB.
‘On an overall basis, this means the State is about €1.3billion above break-even on its €29.4billion investment in AIB, Bank of Ireland and PTSB from direct shareholding linked income and has recovered a further €1.8billion from the banking sector since the introduction of the bank levy.’
