Shares in AIB have fallen by almost a fifth today to 7.2 cents each. Together with yesterday’s sharp fall it means around €16bn of notional value has been wiped out since yesterday afternoon.

On Monday the Minister for Finance Michael Noonan warned that shares in the bank were overvalued by the markets – prompting the sell off.

The minister will bring forward plans by the end of the year setting out the route to reprivatisation of AIB.

Based on current trading AIB shares still trade at a multiple to most banks, including Bank of Ireland, so further dramatic falls are expected.

That privatisation process will dramatically increase the portion of bank shares available to trade from the current minimal levels of less than 1pc.

The sale process, which will be accompanied by a tidying up exercise to reduce the number of outstanding shares, is expected to kick off in earnest during the second quarter of next year.

Online Editors