The Irish government sold 5% of AIB Group Plc, returning the bank to majority private ownership for the first time since the financial crisis and raising the prospect of pay restrictions being relaxed.

The state’s holding in the bank fell to approximately 46.9% from about 51.9% as a result of the placing to institutional investors, the government said in a statement on Wednesday.

The state has been reducing its stake, which was taken during the financial crisis, down from 71% through a share trading plan since January 2022.

The placing was priced at €3.64 per share and raised a total of €480.5 million which will be transferred to the Ireland Strategic Investment Fund, according to the finance ministry.

AIB shares traded 1.8% lower at €3.75 as of 8:37 a.m. in Dublin.

The government imposed restrictions, including salary caps and an effective ban on paying bonuses to staff, on those lenders it bailed out during the financial crisis. Limits were lifted at Bank of Ireland Group Plc after it was returned to full private ownership in 2022.

Earlier this year Finance Minister Michael McGrath said the government would discuss when to consider adjusting limits on bankers’ remuneration at AIB when its stake approached 50%.

“While the relationship framework which governs the relationship between the state and AIB remains in place, the reduction in the state’s shareholding in AIB to below 50% is a significant milestone on the path to normalizing this relationship,” McGrath said in a statement Wednesday.

The price achieved was 23% higher than the state’s previous accelerated book build transaction in November 2022, he added.

The share trading plan was also extended for a further six-months.

BofA Securities, Goldman Sachs International and Goodbody Stockbrokers UC acted as Joint Bookrunners in connection with the placing, according to a separate regulatory statement.

The Irish state became a key player in the Irish financial sector after it was forced to rescue several lenders during the financial crisis. Overall, the government injected about €64 billion into Ireland’s banks, with about half of that spent on the former Anglo Irish Bank and Irish Nationwide, which were since wound down. Approximately €698 million has been raised from the AIB trading plan since it became operational in January 2022, according to the government.

N.M. Rothschild & Sons Limited acted as independent financial adviser and William Fry LLP and Allen & Overy LLP acted as legal counsel to the Department of Finance for the sale.

(Updates throughout with pricing detail and statements)