Monday 18 December 2017

AIB seeks ‘self-help’ before investor call

AIB: 'pretty big capital hole' to fill. Photo: Bloomberg News
AIB: 'pretty big capital hole' to fill. Photo: Bloomberg News

Dara Doyle

Allied Irish Banks plans to raise capital by selling assets or finding a strategic investor before turning to shareholders or the Government.

The lender will have a “pretty big capital hole” to fill after it sells toxic property loans to NAMA and wants to explore “self-help” options first, Managing Director Colm Doherty said on an analysts’ call today.

Doherty said the lender has had discussions with a number of institutions interested in buying a strategic stake, without identifying them.

The potential investors are seeking exposure to the lender’s Bank Zachodni WBK SA unit in Poland, which he described as the “jewel in the crown” of the bank’s portfolio.

AIB, which today reported its first-ever annual loss, will sell as much as €23bn of loans to NAMA. The bank posted a net loss of €2.41bn in 2009, after setting aside €5.4bn to cover bad loans.

The transfer will start at the end of March, Doherty said. He said he couldn’t give additional clarity on the timing or how much the agency will pay for the loans.

Doherty, who was appointed managing director in November, said the bank will shortly engage in a “liability-management exercise” to help boost capital.

Rival Dublin-based lender Bank of Ireland boosted its capital by about €405m last month by swapping securities with a face value of €1.62bn for new, longer-dated notes.

AIB rose 5pc to €1.05 in Dublin, giving the company a market value of €927m. The shares have fallen 88pc in the last 18 months.

The ISEF, the index of Irish financial companies, has plunged 86pc in that period.


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