AIB leaves Canada to refocus on strategies at home
Published 05/07/2011 | 05:00
AIB is leaving the Canadian banking market after just four years as it retrenches back to Ireland and becomes one of the two so-called 'pillar banks'.
AIB set up a lending operation in Toronto just as the Irish property boom was coming to an end and the US subprime crisis was getting under way.
Now the loan book it assembled there is being sold to US stockbroker Raymond James, which has a financial services division.
AIB will sell its lending book of $650m and effectively cut its links with Canada, with an office there also expected to shut. The terms of the sale were not disclosed and it is not clear whether AIB is selling the loans at book value or taking a steep discount.
AIB is currently trying to raise €13bn, the largest capital raise ever undertaken by an Irish company.
Raymond James said the assets were "highly diverse and performing well".
The purchase would expand Raymond James Bank's corporate and real-estate portfolio by 10pc, said Thomas Macina, an executive vice-president.
"The transaction, the terms of which will not be disclosed, is expected to close prior to the end of the September quarter and is subject to Canadian and US regulatory approvals,'' said a statement.
The Canadian expansion, started under previous chief executive Eugene Sheehy, was part of an attempt by the bank to diversify its earnings base away from Ireland. Purchases in Bulgaria, Poland and the US were all part of this strategy.
The Canadian operation was part of AIB North America and focused on leveraged finance, energy and property lending. Employees from AIB's US units were used to staff the Canadian operation.