Santander bids for 100% of Polish bank

SPANISH banking group Santander has bid 16.6 billion zloty (€4.3bn) for 100% of Poland’s Bank Zachodni, of which it is still awaiting clearance to gain control of Allied Irish Bank’s controlling stake.

As part of its ongoing quest to meet revised capital requirements, AIB agreed to sell — for around €3bn — its 70.4% stake in Zachodni to Santander last September.

While still before the Polish regulator awaiting approval, that deal is expected to be formally completed in weeks.

Santander, meanwhile, now expects to gain full ownership of the Polish bank by the beginning of April. However, while the Spanish bank seems convinced that it will gain approval to take over one of Poland’s banking leaders, the local regulator was declining to comment on any sort of time-scale for its decision.

While AIB was forced into selling out of Poland on the back of pressures accentuated by the economic deterioration here, Santander — Spain’s largest bank — has been looking to expand into emerging markets, such as Poland, in order to become less dependent on its own home market, which is attempting to come through its worst recession for 60 years.

The bank has invested more than €7bn in the last year on expanding — through acquisition — in Britain, Germany and Mexico.

The bank has already said, only in the last week, that it has completed its international expansion and doesn’t need to buy more to grow.

The move for total ownership of Bank Zachodni — investors control the remaining 30% that wasn’t in AIB hands — seems to be more about conforming with local regulations; any investor looking to buy more than a 66% stake in a listed entity being required to bid for 100% of the company in question.

Bank Zachodni’s share price was heading towards a three-year high, yesterday, on the back of the news of the revised Santander bid.

Ultimately, the news doesn’t affect AIB, directly, and is unlikely to quicken the formal decision of the sale of the Irish bank’s stake.

Once formal approval is granted for AIB’s Polish divestment, the Irish government’s stake — following its last capital injection, prior to Christmas — in the bank will increase to 93% and virtually make it a nationalised entity.