Four bidders in race to buy AIB’s British SME loan book

Banks and debt funds among contenders in binding offers phase for €1.2bn portfolio

AIB is quitting the British SME market, with four bidders in the running  to acquire its loan book. Photograph: Aidan Crawley/Bloomberg

AIB is quitting the British SME market, with four bidders in the running to acquire its loan book. Photograph: Aidan Crawley/Bloomberg

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Four parties remain in the race for AIB’s almost £1 billion (€1.2 billion) British SME business loan book, which was put on the market earlier this year, according to sources.

AIB chief executive Colin Hunt told analysts on a call this week, after the bank reported interim results, that the process was now entering a binding offers phase with “a number of interested parties”. Sources said four parties remained in the mix, but declined to identify them, other than to say they included both banks and debt funds.

A spokesman for AIB declined to comment on the number or identity of parties still in the process. “We signalled our intention to exit the GB commercial market and are engaging with customers over the coming months to outline the next steps and how we can continue to support their business needs through the transition,” he said.

The Irish Times reported in March that AIB had hired international boutique investment bank Alantra to find a buyer for the British SME business, which also includes £2.8 billion of associated deposits. The bank plans to complete its exit from the British SME segment of the market by the end of this year.

Labour-intensive

Mr Hunt announced last December that the bank was retrenching from the British SME market, while doubling down in corporate lending in niche areas such as renewable energy, manufacturing and warehousing.

The exit from this labour-intensive segment of the market will save the bank an estimated €35 million in the coming years. The group reaffirmed its commitment to its Northern Ireland business at the time.

However, the bank has since moved to restructure the business in the North, announcing last month that it would be closing eight of its remaining 15 branches in the six counties, following hot on the heels of decisions by Bank of Ireland and Danske Bank to shut branches in the region.

Branch cull

AIB had cut its network in the North from 30 branches in 2017.

Bank of Ireland said in February that it was cutting its Northern Irish network by more than half to 13 locations as part of a major branch cull across the island this year.

Meanwhile, Danske, the biggest bank in Northern Ireland, said last month it was shutting four branches in that market in October in a move that would reduce its footprint to 32 locations.

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