The Department of Finance and Britain's NatWest Group said today they had jointly sold 54.6 million shares in Permanent TSB - representing 10% of the bank's share capital.

The State and NatWest will receive close to €110.5m from the share sale, or €55.2m each.

They had originally set out to sell a combined 6% of the Irish bank.

The State will continue to hold 57.4% of Permanent TSB while NatWest will retain a 11.7% stake.

The Government cut its 99.2% shareholding in the bank to 75% in a share offer in 2015 but had not sold any shares in the bank since.

NatWest took a near 17% share in the bank as part of Permanent TSB's recent acquisition of around €7.6 billion of loans and assets from NatWest's Irish unit Ulster Bank, which is exiting the Irish market. That move diluted the Government's holding to 62%.

The Minister for Finance Michael McGrath today welcomed the successful disposal of part of the State's shareholding in Permanent TSB.

"PTSB returned to the Irish stock market in April 2015 by means of an IPO. Since then, it has not been appropriate, nor at times even possible, to further reduce the State's ownership in the bank," the Minister said.

"However, a strong economy, careful stewardship and the successful acquisition of a sizeable portion of Ulster Bank’s business have transformed PTSB," he added.

The Minister said yesterday's transaction received "significant demand" from a wide number of local and international investors.

He said the sale will help improve liquidity and interest in the bank as it continues preparations for a wider disposal programme in the coming years.

"As I have previously stated, the Irish Government believes that banking is an activity that should be provided primarily by the private sector and that taxpayer funds which were used to recapitalise the banks should be recovered and used for more productive purposes," Michael McGrath said.

Eamonn Crowley, Permanent TSB's group chief executive, said the bank welcomed the decision by the Minister for Finance and NatWest to dispose of shares in PTSB in accordance with the terms of a shareholder cooperation agreement.

"This is another important step in normalising the composition of our shareholder base and creating further liquidity in the bank's shares," Mr Crowley said.

"Furthermore it demonstrates market appetite to invest in PTSB following a period of transformational growth and supports our stated ambition to deliver value for the Irish taxpayer," he added.