AIB relocating US office in Manhattan

AIB, THE bank into which taxpayers have sunk €3.5 billion, is moving its US operations to new premises in Manhattan, but is making no savings on its rent bill.

The bank confirmed yesterday that the lease on its present New York office, at 405 Park Avenue, is up. It is moving to 1166 Sixth Avenue, which is located between 45th and 46th streets, a property partly owned by US real estate entrepreneur Edward J Minskoff.

The bank’s neighbours in the building include insurance giant, Marsh McLennon and investment group, DE Shaw.

The taxpayer-controlled bank refused to say how much rent it is paying, but said that it was the same amount that it has been paying for Park Avenue, meaning that the group is making no savings on its rent bill.

Late last year, there were a number of lettings in the same building for between €33 per sq ft and €45 per sq ft a year. On that basis, the bill for leasing an entire floor in the building would run to somewhere between €1.2 million and €1.6 million a year.

The building itself is described as “institutional style” and property sources say the area of Manhattan in which it is located is considered good with rents reasonably expensive.

AIB refused to say how much space it is renting, or whether or not it is taking up an entire floor.

A spokeswoman for the bank said the building was more suitable for its operations than the Park Avenue premises.

She explained that the bank’s operations are spread out over a number of floors in Park Avenue, while it will be able to contain all its operations on just one floor in the Sixth Avenue premises.

AIB’s activities in the US are focused on capital markets, corporate treasury and advising non-profit organisations.

As part of its recapitalisation efforts, it is selling its stake in US bank, MT and expects to make about €900 million from the deal.

Taxpayers have already pumped €3.5 billion into AIB to plug the whole left in its balance sheet by its property lending activities.

At last night’s closing stock market price of 28.8 cent, AIB has a market capitalisation of just €311 million. Its rival, Bank of Ireland, was worth €2.1 billion.

As a result of the recapitalisation, taxpayers will end up owning more than 90 per cent of the bank.