AIB sets its sight on Polish regional bank

AIB Bank is on a shortlist with two other international banks to purchase a majority stake in the Polish regional bank, Bank Zachodni. The other bidders are France's Societe Generale and Austria's Raiffeisen Zentralbank.

In line with company policy, AIB would not comment on its intentions although industry sources have identified it as the third bidder.

AIB already has a subsidiary operation in Poland with a 60.2 per cent stake in WBK Bank. It has also recently been linked with a bid for a 55 per cent stake in Pekao SA, which is being sold by the Polish government.

Bank Zachodni was set up in 1989 following the separation of 49 Lower Silesian branch banks of NBP. Its headquarters is in Wroclaw and in 1997 it reported after-tax profits of 68.2 million zlotys compared with 140.8 million zlotys in the previous 12 months.

The three institutions are expected shortly to undertake due diligence on the bank's operations before being invited to make a final offer, probably in May.

AIB is also understood to have been short-listed as a potential buyer of Pekao SA, one of Poland's biggest banks. Market estimates put a price tag of up to £670 million on Pekao. It emerged following the amalgamation of four state-owned banks and has about 20 per cent of the domestic banking market.

AIB has been active in the Polish market since 1995, when it first secured a shareholding in WBK. In 1997, its stake rose to 60.2 per cent, representing a total investment of £98 million.

WBK has 160 branches, mainly in the west of Poland, with headquarters in Poznan. It is ranked among the top 10 banks in Poland and claims a market share of around 3 per cent. Last year it contributed some £48 million profits for AIB group.

International interest in Poland has grown substantially and most major banks and institutions have a presence there. Poland is a large market with a population of close to 39 million.