AIB is reportedly moving closer to concluding its second major overseas asset disposal, by off-loading its 23% stake in US bank M&T.
The New York-based institution is understood to be close to finally agreeing a deal that would see it sell a majority stake in its business to Spanish banking giant, Santander — which recently snapped up AIB’s Polish interests for just over €3 billion.
AIB — which also this week sold its stake in Goodbody Stockbrokers to Co Kerry-based company, Fexco for €24m — is in the midst of a wide-reaching foreign asset disposal round, aimed at meeting its €7.4bn end of year recapitalisation effort.
Regarding the US sale, M&T is understood to be talking with the Federal Reserve over selling a majority stake to Banco Santander, over time.
The deal could see the Spanish bank take a minority stake at first, but holding an option to up it to over 50% within a few years.
Part of the current round of talks are thought to feature Santander negotiating with AIB over taking over its 23% holding. The Federal Reserve is expected to make a judgment call on the M&T/Santander merger by early October.
It has been hoped AIB could raise more than €1.1bn for its stake in M&T alone.
The transaction could see Santander trading its holding in US bank, Sovereign for shares in M&T.
Meanwhile, AIB announced yesterday that regarding its continuing businesses — excluding the cost of the Eligible Liabilities Guarantee plan and its NAMA-related loans — the net interest margin for the first half of this year would have been 155 basis points.
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