Santander pullout from US deal blow to AIB

BANCO Santander’s decision to turn down the option of buying AIB’s stake in M&T has increased the woes of the country’s former leading bank.

AIB shares fell more than 6% yesterday as it became clear that the bank will have to place the stock on the market at a severe discount.

Its 22%-plus stake in the bank, based on the east coast of the US, was worth an estimated €1.6 billion, but the placement may raise only €800 million in fresh capital after initial investment costs are factored in.