Business Irish

Thursday 23 November 2017

AIB's Polish arm's stock rises as French re-emerge for bid

Joe Brennan

Shares in Allied Irish Banks' Polish unit Bank Zachodni WBK continued to rally yesterday as two leading French banks apparently re-emerged in the race to buy the Warsaw-listed lender.

Bank Zachodni's stock added 0.8pc to 206 zloty (€50.50), bringing its advance over the past five sessions to almost 12pc, amid renewed hopes the bank's sale will attract strong interest.

"You're going to get a lot of posturing from a lot of people before the first round of bids are due in," a source familiar with the sale said yesterday. "Everybody's going to want to have a look at the information memorandum on the sale -- but that doesn't mean they're serious buyers."

French daily 'La Tribune' reported yesterday that BNP Paribas and Societe Generale (SocGen) were both looking "very seriously" at Bank Zachodni, Poland's fifth-biggest bank, in which AIB has a 70.2pc stake.

The report suggested both are looking at documentation relating to the sale. However, it is understood the information memorandum has not yet been circulated to prospective buyers, though this is expected to take place within days. The first round of bids will be due in the second half of June.

The reported interest of BNP Paribas goes against recent comments from the financial giant's chief executive, Baudouin Prot, that he had "no" interest in Bank Zachodni.

Yesterday's reports put the French group as being best placed to win the bidding, while suggesting that SocGen would need to raise additional capital to seal a deal. Last week, Polish newspaper Rzeczpospolita said that SocGen would not be bidding for Bank Zachodni.


AIB would hope to have announced a transaction by September, along with the sale of its 22.5pc stake in US bank M&T and, possibly, its UK unit -- before going cap-in-hand to shareholders and the Government to plug the remainder of the hole in its balance sheet.

"The sale of the Polish bank is anticipated to net AIB €2bn, accounting for the lion's share of our estimate of its proposed €4.4bn disposal gains," said Eamonn Hughes, analyst with Goodbody Stockbrokers.

AIB must raise €7.4bn by the end of this year to bolster its balance sheet against mounting impaired losses and meet a new regulatory capital levels.

Last week, it emerged the Polish government was speculated to be mulling joining forces with state-controlled financial groups -- including the country's largest lender, PKO, and insurer PZU -- to mount a bid for Bank Zachodni.

Irish Independent

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