AIB set to sell stake in M&T

AIB could be close to raising part of its end-of-year capital requirement through the sale of its 22.5% stake in New York-based M&T Bank.

Overseas press reports suggest Spanish banking giant Santander is in fresh talks regarding the takeover of the US institution. The Financial Times reported yesterday that Santander has resumed talks with M&T — which had earlier collapsed in May — over the potential merger with Santander’s existing American division Sovereign Bank, which was acquired for over $2bn in 2005. Part of such a deal would be the Spaniards snapping up AIB’s stake in M&T for around €1.15bn, say analysts.

“It appears the banks have sounded out regulators about a combination, including the Federal Reserve. However, it appears that the earlier sticking point — who controls the combined business — remains unresolved,” said Eamonn Hughes of Goodbody Stockbrokers.

Santander has made no secret of its plans to expand its presence in the US and Europe, This led to speculation that it might become a single buyer of the AIB’s overseas assets, being put on the market for it to meet its €7.4bn recapitalisation targets.

The Spanish banking group recently emerged as favourite to land AIB’s 70% stake in Poland’s Bank Zachodni, on which there is a loose price tag of €2bn. Talk regarding an outcome there soon grew into speculation that Santander could well end up buying all of AIB’s non-Irish assets.