Tuesday 28 March 2017

M&T prepares to expedite AIB sale of $2.2bn stake

Joe Brennan

Executives at US bank M&T signalled yesterday they "stand ready to help" Allied Irish Banks (AIB) as it prepares to sell a 22.5pc stake in the US lender to shore up its capital reserves.

The unveiling of M&T's quarterly figures yesterday, with net profit jumping 135pc on the year to $151m (€112m), opened a window of opportunity for AIB to flog its $2.2bn (€1.6bn) holding in the US regional bank.

The statement took M&T out of a 'closed period', where publicly quoted companies are restricted in relation to market-moving activities or announcements.

AIB has put a 'for sale' sign on its M&T stake -- and its interests in the UK and Poland -- as it rushes to raise €7.4bn of capital by the end of 2010 to meet new regulatory capital requirements.

M&T executives received three questions from analysts in a conference call yesterday on its results.

The bank's chief financial officer Ren Jones said: "You all know the issues and AIB has been very public about what its intentions are due to the difficulties it is having on the capital front."

Discount

He added: "We stand ready to help execute a transaction in the most efficient and orderly way."

Market observers believe that AIB is most likely to opt for a broad placement of the stock among investors at a discount of up to 10pc against M&T's market price.

It does not have to give M&T's management first refusal in the event that none of the buyers of the stock end up with more than 2pc of the US bank.

Shares in M&T advanced yesterday on the back of the bank's better-than-expected figures.

The group credited its performance to lower bad loan losses, a widening of its net interest margin, and a 6pc rise in deposits from the end of December.

Irish Independent

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