Polish premier 'respects' AIB over bank sale decision

POLAND’S PRIME minister Donald Tusk says he respects AIB’s decision to sell its Polish division, Bank Zachodni WBK, ahead of an offer from the state-controlled lender, PKO Bank Polski.

Mr Tusk said it was “a pity” PKO failed in its bid to buy AIB’s stake in BZ WBK, Poland’s third largest bank, but the government would not interfere in the regulatory approval process. “The world moves on,” he said.

AIB is selling 70 per cent of BZ WBK and its half-share of a Polish asset manager to Spanish bank Santander for €3.1 billion. The sales will boost AIB’s capital by €2.5 billion, raising one-third of the €7.4 billion the bank requires before the year’s end to meet new regulatory capital rules.

The Polish regulator is investigating whether AIB disclosed confidential information in advance of agreeing the sale.

A spokesman said it was “hard to say” how long the investigation would take but that the inquiry was routine after such an agreement.

AIB said the sale process was “entirely appropriate” and it would be “happy to co-operate fully”.

Analysts at Dutch bank ING said AIB was “not out of the woods yet” and it was “likely” to end up in majority State ownership. They said the Bank Zachodni WBK sale was “a step in the right direction”.

The Financial Regulator here has signalled it will accept the €2.5 billion capital raised in calculating the required €7.4 billion, even without Polish regulatory approval before the year’s end.

AIB must raise a further €4.9 billion, of which analysts expect €2 billion to be raised from the sales of a 22.5 per cent stake in US regional bank MT and the bank’s UK banking division.

The bank is also planning to tap shareholders in a rights issue. The Government will make up any capital shortfall by increasing its stake from the current level of almost 19 per cent if so required.

“The mix of how the bank will raise the €7.4 billion may change – it will be a mixture of asset sales, government money and investor money,” said Oliver Gilvarry, analyst at Dolmen Securities. “We have two months to see how that is going to pan out.”