Thursday 26 April 2018

AIB could boost capital by selling its smaller assets for €400m

Laura Noonan

AIB could make as much as €400m by selling "smaller" assets as part of its massive disposals process, it emerged yesterday.

The news comes as the bank battles to boost its capital by €7.4bn to meet an end-of-year deadline set by the Financial Regulator.

AIB has already secured €2.5bn of this by agreeing to sell its Polish interests to Spanish banking giant Santander.

The bank is also expected to reap as much as €1.2bn from selling its stake in US bank M&T and could make another €1bn from selling its UK operations.

Yesterday, however, it emerged that an extra €400m could be eeked from "smaller" disposals, putting AIB's total asset haul as high as €5.1bn.

In a research note issued yesterday, stockbrokers Bloxham said that "following a meeting with AIB", it expected "further smaller sales could net the group up to €400m".

AIB's general manager of group finance Alan Kelly last night stressed that the bank was not saying it would definitely raise that €400m. "We've said from the outset that we're looking at all non-core assets," he said.


"We're saying that the smaller sales could potentially raise up to that [the €400m]."

Earlier in week, AIB announced that it had sold stockbroking firm Goodbody's for €24m.

The other smaller sales may include AIB Investment Managers and the bank's eastern European holdings outside of Poland.

In Bloxham's note, the stockbrokers also said that following its meeting with AIB, it expected "the sale of an asset by the end of September for circa €1.2bn".

AIB is reportedly on the verge of selling its 22pc stake in M&T to Santander in a deal that could reap about that amount.

The bank has also received final bids on its UK business, including First Trust in the North and AIB GB. The timing of the UK transaction, however, is unclear.

AIB will go to the market to raise the shortfall between its asset sales and year-end capital demand, a shortfall that could be as low as €2.3bn.

Recent speculation has suggested the bank may even begin an equity raise before all the sales have been agreed, so it will have sufficient time to communicate with the market.

The bank is facing a race against the clock to get its capital fully secured by the end of the year or letting the State pick up any shortfall and potentially take majority ownership of the lender.

Irish Independent

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