DUBLIN, March 2 (Reuters) - Allied Irish Banks (AIB) became the first of Ireland's lenders to restart dividends since the financial crash almost a decade ago, proposing a 250 million euro ($263 million) payment and saying it was ready to IPO this year.
The 99 percent state-owned lender had been in talks with regulators over returning a "conservative, ongoing" dividend since last year and said on Thursday that its strong financial results and robust capital supported the move.
Ireland's second-largest bank by assets, whose 21 billion euro taxpayer bailout was the biggest for any Irish bank still trading, reported a full year pre-tax profit of 1.7 billion euros, down from 1.9 billion a year ago.
But that was primarily as a result of writing back far fewer of its remaining and shrinking 9.1 billion euros in provisions racked up during Ireland's financial crisis. Its writebacks totalled 294 million last year versus almost 1 billion in 2015.
The bank's core tier one capital ratio - a measure of financial strength - increased sharply to 15.3 percent at the end of 2016 from 13.7 percent three months earlier.
Ireland appointed Bank of America Merrill Lynch, Deutsche Bank and Davy Stockbrokers as global coordinators for the potential sale of a stake in the bank earlier this year and AIB reiterated that it was ready to go.
"The bank is now ready for an IPO, when market conditions permit and the Minister decides," AIB chief executive Bernard Byrne said in a statement.
Last year, Ireland pushed back the timetable for selling a 25 percent stake in AIB, citing unfavourable market conditions, but Finance Minister Michael Noonan said last month that rising bank share prices suggested it might get the value needed.
He has raised the possibility of launching an initial public offering as early as May, or during another possible window in the third quarter. ($1 = 0.9503 euros) (Reporting by Padraic Halpin; Editing by Alexander Smith)