Monday 19 March 2018

M&T may benefit from Obama curbs

Emmet Oliver

AIB could generate €920m from the sale of its 24pc stake in US lender M&T Bank, with the shares in the American bank up 14.4pc this year.

NCB said M&T could be one of the few winners out of US President Barack Obama's banking reforms.

"Enforced regulatory moves to limit the size of banks may leave M&T in a stronger position than its larger peers, making a disposal for AIB an easier prospect,'' said the stockbroker.

The shares were at $76.37 yesterday, although the stock dropped 2.8pc when the market opened.

However, they rose when the initial Obama announcement was made on Thursday.

Unlike Irish banks, M&T is benefiting from lower credit costs and higher net-interest margins. Its second largest shareholder is Warren Buffett, who has been mentioned as a potential suitor for the AIB stake.

However, interest from well-capitalised Canadian banks is the most likely at this point. A number of banks have expressed an interest in taking over the stake, the head of the US regional lender said late last year. Speaking to influential US financial magazine 'Barron's', M&T's chairman and chief executive Robert Wilmers admitted to being hounded by bankers about AIB's holding. However, Mr Wilmers said he had seen "no sign of any intention to sell".

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business