Santander favourite for Polish AIB

SPANISH banking giant Santander has emerged as the latest ‘favourite’ to land AIB’s 70% stake in Poland’s Bank Zachodni and could end up taking over most of the Irish banks’ international assets.

Santander winning the race for Zachodni — local media reports in Poland have put the Spaniards in the frame — could increase AIB’s chances of getting a better than average price for its controlling stake, something some commentators thought was lost amid growing talk of one of the other Polish-based banks buying the asset.

A price tag of around €2 billion had been loosely placed on AIB’s Polish operations by some market commentators and the sale of Zachodni is clearly viewed as being the key cog in the bank’s overall asset disposal strategy, which is aimed at raising the €7.4bn it needs to meet its end-of-year refunding targets, as set out by the Financial Regulator.

The media reports emanating from Poland also suggest, however, that Santander could help in that regard too. The latest speculation has it that the Spanish banking group is, in fact, negotiating with AIB to acquire all of its foreign operations — including its 23% stake in M&T Bank in the US and its various British-based interests, including the First Trust network in Northern Ireland. Santander is broadly being linked with rising consolidation opportunities in Britain and the US as it looks to expand its international reach.

Upon publishing its latest set of quarterly results, last week, Bank Zachodni said that it had held four meetings with potential buyers. The Polish Government is, meanwhile, said to be preferring a successful bid from one of Zachodni’s domestic counterparts (Bank Pekao or PKO Bank Polski) in order to lower the amount of foreign ownership in the country’s banking network.

“With an end of year deadline for its recapitalisation, at its AGM in April AIB indicated that it hoped to be in a position to approach shareholders in September. Clearly, agreed disposals are a pre-requisite for this and any update on progress with its asset disposals will be a key focus when AIB reports its interim results,” said Emer Lang of Davy Stockbrokers in a research note yesterday.

Regarding those results — due later today — analysts seem divided as to what to expect.