AIB ‘faces delay’ in sale of Polish bank stake

AIB is unlikely to be able to wrap up the sale of its Polish operations by the end of this month and could even be facing a huge challenge to conclude a deal before the end of the year.

According to a source familiar with the workings of the Polish banking and regulatory systems, “both AIB and foreign bidders are underestimating the process of getting a deal done and the ability to meet the year-end deadline set down by the regulator in Ireland”.

AIB is in the midst of a well-publicised race to raise €7.4bn in fresh capital by the end of the year to meet Government guidelines, something it is aiming to do through the disposal of most of its non-Irish based assets. Chief amongst these is its 70% stake in Bank Zachodni in Poland.

The same source suggested that it would be near impossible for a deal to be concluded by the end of September and highly unlikely that a deal could be finalised by the end of December, meaning that AIB would have to tap the state for further capital.

Polish bank Bank PKO is thought to be vying with international players Santander and BNP Paribas for AIB’s Polish business. The difference between an international and domestic buyer for the asset could be significant in terms of what kind of money AIB ultimately manages to raise.

It has been speculated that Poland’s government wants a domestic buyer for Zachodni, in a bid to lessen foreign ownership levels in its banking system, and it was reported yesterday that Polish ministers are due in Dublin, before the end of the week, to discuss a PKO deal with AIB.

Acquiring more than 66% of a Polish company requires a compulsory tender offer for 100% of the company. According to the source: “It’s highly unlikely anyone will announce a tender offer for 100% of Zachodni, as they’re likely to be obliged to sell down back towards a 70% level and may incur losses doing so.”