AIB to name preferred bidder for Polish bank

AIB is expected to receive final bids for its 70% stake in Polish financial institution Bank Zachodni by the end of today, with reports suggesting the Irish bank will settle on a preferred bidder sometime next week.

Differing reports on the progress being made on the sale are emanating on a daily basis, not helped by AIB remaining tight-lipped on its foreign disposals programme, which also includes the sale of its 22% stake in US bank M&T.

However, it is thought that Poland’s PKO Bank Polski, Spanish banking giant Santander, and France’s BNP Paribas are set to bid for AIB’s controlling interest in Zachodni.

The Irish bank has said it hopes this month will show significant progress on its sales process, which is being carried out for it to reach its end of year €7.4 billion funding deadline.

While some sources are suggesting that a preferred bidder could be known by next week, other sources have suggested AIB has been underestimating the extent of work to be done to successfully offload its Polish business even before the end of this year.

Polish government officials were in Dublin yesterday to promote the idea of a domestic, through PKO, takeover of Zachodni, although the Department of Finance was not elaborating on such events, while representatives of the other two interested parties are thought to be meeting Poland’s treasury department in the coming days.

One of the potential headaches for AIB in its race against time to raise funds through asset disposals is that, in the case of Poland, a domestic buyer for its stake in Zachodni could possibly be moved through quicker.

However, such an outcome might also result in it getting a lower-than-anticipated price for the asset.

AIB’s share price was marginally down, by 2c, at 76c, yesterday on a broadly flat day for the ISEQ as a whole, with the index dropping 15.76 points to 2,744.97.