Wednesday 22 November 2017

Bidders for AIBIM demand pension clarity

Emmet Oliver Deputy Business Editor

Bidders for AIB's investment arm (AIBIM), which the bank is selling to raise much-needed capital, are in discussions about whether AIB's own pension fund will form part of the sale.

The two leading bidders are financier Dermot Desmond and Bloxham Stockbrokers/Bellevue Asset Management, with Irish Life & Permanent (IL&P) described as a third outside bidder.

According to AIB's most recent financial statements, the bank's pension fund has assets of €2.9bn, while AIB Investment Managers had assets under management of €8.5bn.

The continued link between AIB Investment Managers and AIB Group is a key concern, some of the bidders have told the Irish Independent.

It is understood there has been contact between the trustees of the pension fund, who ultimately decide who manages the fund, and the bidders.

One source said there was no legal way for AIBIM to bind in the bank's pension fund, but the talks were about giving a "sufficient level of comfort'' to bidders to allow the sale process to continue.

The source said that the issue was being dealt with and there was no delay in the process over it.

The sale is being handled by Goodbody Stockbrokers, which used to be owned by AIB, but is now in the ownership of Kerry-based Fexco.

Contrary to some reports, none of three bidders are near being awarded preferred bidder status. The issue of the pension fund would have to be clarified before any bidder is selected, said the source.

AIBIM is being offloaded after AIB ditched other assets to generate capital, including a stake in US lender M&T and a Polish business known as Bank Zachodni.

Even with these sales, the bank is still short of a capital targets required by regulators.

By the end of February the Central Bank must direct AIB to achieve a new target of 12pc core tier 1 capital. This is part of a process of trying to "overcapitalise'' the bank, which is still weighted down with impaired assets.

Irish Independent

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