Tuesday 12 December 2017

Polish treasury backs PKO bid for AIB's 70pc stake in Bank Zachodni

Joe Brennan

POLAND moved yesterday to boost the chances of state-controlled PKO Bank mounting a credible bid for Allied Irish Banks' 70.2pc stake in Bank Zachodni WBK.

The country's treasury minister Aleksander Grad said his department would ask PKO at its annual general meeting this Friday to delay a decision on its dividend level for this year so it could determine the bank's chances of taking over Zachodni bank.

AIB put its stake up for sale at the end of March, along with its 22.5pc holding in US lender M&T and its entire UK division, as the Financial Regulator demanded it raise €7.4bn of capital by the end of the year to reach new regulatory targets.

Poland's government owns 40.99pc of PKO, the country's largest lender by assets, and sees the Zachodni deal as an opportunity to reduce foreign ownership of the country's banking sector. It is also reportedly encouraging other state-owned financial institutions to consider a joint approach with PKO for Zachodni.

Mr Grad said that the Polish Treasury was in constant contact with Irish Government officials about the process. The Financial Regulator is also closely involved. Analysts estimate AIB can unlock up to €2.5bn of capital from the sale of the Zachodni stake.

PKO chief executive Zbigniew Jagiello said the group "welcomes shareholders support" for expansion. "We want to be an unquestioned leader in the Polish banking sector and that is why we are carefully looking at the market," he said.

Polish law requires an investor that buys more than 66pc of a publicly quoted company to bid for the rest of the shares.

French banking giants BNP Paribas and Societe Generale, Russia's Sberbank, Italy's Intesa SanPaola and Poland's second-largest bank, Bank Pekao, count among a number of potential suitors.

Irish Independent

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