AIB confident of raising capital independently

AIB remains confident of raising necessary post-NAMA capital without the need of further Government assistance, but hasn’t ruled out the latter option.

At yesterday’s extraordinary general meeting proposing the bank’s participation in NAMA, AIB chairman Dan O’Connor reiterated that a number of options were being considered. “As previously indicated, it’s our intention to raise additional capital within the next year. We’re currently exploring a number of ways to bolster our equity capital base through asset sales, the introduction of a strategic investor and a public share issue, which may require Government support.”

His mention of valuable assets such as its stakes in US bank M&T and Polish bank, Bank Zachodni WBK, would also suggest that every asset is up for consideration.

“Our share price reflects the uncertainties in the market and over the last 12 months the Government has given its support in many areas and NAMA is another step.

“We’re getting every encouragement to try to raise capital away from Government sources,” he said, but added the Government is there if other options fail.

Asked by one shareholder about the prospect of merging with Bank of Ireland, Mr O’Connor said that “no consideration, whatsoever” had been given to the option.

Although the bank’s shareholders voted overwhelmingly in favour of NAMA involvement, the board were criticised from the floor. One shareholder, Niall Murphy, announced his intention to propose a resolution for the removal of board members Dan O’Connor, Dick Spring and managing director Colm Doherty at next year’s annual general meeting.

Mr Doherty’s appointment as managing director also seemed to rankle with some who questioned the bank’s need to launch an international search for a new leader only ultimately to promote from within – Mr Doherty having previously headed up AIB’s Capital Markets division. Mr O’Connor said it had been “an exhaustive search“, which resulted in the best person for the job being appointed.

Another shareholder asked about the prospects of a comprehensive inquiry into the causes of the downturn in the Irish banking system, as has already been called for by the Irish Bank Officials’ Association and Central Bank governor Patrick Honohan. In reply, Mr O’Connor said that, if one is held, AIB would give “absolute 100% total co-operation”: “Regardless of any inquiry, serious mistakes have been made and no further wrongdoing will be tolerated.”