AIB sells its Polish Bank – Another bad move Lenihan

AIB HAS agreed the forced sale of its prized Polish bank, raising a third of the €7.4 billion that it must find by the end of the year to plug the capital hole in its finances and avoid majority State ownership.

Spain’s largest bank, Santander, bought AIB’s 70 per cent stake in Bank Zachodni, Poland’s third-largest bank, for €2.9 billion and the bank’s share in a Polish asset management firm for €150 million.

The sales boosted AIB’s capital by €2.5 billion, leaving €4.9 billion left to raise to shore up the bank’s cash reserves following the property crash and reach the Financial Regulator’s capital target by the end of this year.

The shortfall amounts to about eight times the bank’s market value.