SPANISH banking giant Santander, said to be interested in deals involving AIB’s British and US operations, could potentially be a bidder for the entire AIB group.

AIB last night responded to the challenges laid down the by the new regulatory regime that demands it finds €7.4 billion to achieve an 8% tier 1 capital ratio by the year end.

AIB is under pressure to sell off its prized US, British and Polish assets as the Government anticipates it could become a majority stakeholder in the bank.

ANALYSTS said the Government taking a 70% stake in AIB and 40% in Bank of Ireland will have positive implications for the economy over the coming years.

AIB bank lost a total of €2.65 billion, or more than €8.7 million a day, overall for 2009 and €3.5bn in Ireland, the equivalent of €11.5m for each working day.

IN his first major statement about his plans for that AIB Group, new chief executive Eugene Sheehy said yesterday he had no intention of trying to reinvent the wheel.

SPECULATION is mounting that AIB will sell out of its US minority stake in M&T valued at €2.3 billion.

AIB’s long term strategy is based on an “independent future” for the bank, outgoing chief executive Michael Buckley told staff yesterday.

PROFIT growth of 19% at US bank M&T exceeded expectations but it had a modest positive impact on the shares price of its largest shareholder, AIB bank.

THE €150 million loss recorded by AIB on the sale of British asset management arm Govett was defended by chairman Dermot Gleeson at the bank's annual general meeting yesterday.

M&T BANK, the American regional bank in which AIB has a 22.5% stake, had mixed news for investors yesterday as it disappointed with its first quarter profits, but said full-year results would still be on track.

AIB’s investment in M&T, the American bank in which it has a 22.5% stake, is significantly undervalued by the market and not reflected in the AIB share price, according to Davy Stockbrokers.

M&T Bank Corporation, in which AIB has a 22.5% stake, reported third quarter profits of $156 million yesterday, up 42% on last year due to the acquisition of Allfirst from the Irish bank.

AIB has confirmed it is in discussions with American bank M&T for the sale of its US subsidiary Allfirst and the merger is expected to be announced later today.