RTÉ News: AIB to sell stake in Polish bank for €3.1bn
Right, so let's clarify this, the most salient example of the stupid and moronic strategy by this government to redress the banking crisis. Before AIB became mini-Anglo it spent a few decades building itself up into an international bank of stature. In particular, it's Polish subsidiary, Zachodni WBK, was seen as its most successful gambit, built up as it was over 15 years.
Earlier this year, AIB was informed by the regulator that it had to raise fresh funding to reach his new minimums in capital standards. Colm O'Doherty, AIB's new/old managing director who has staked his reputation on ensuring the bank remains out of governmental control, initially thought that the cash required would be about €4b. That's now been adjusted to €7.4b by the bank and €10b if you listen to Peter Matthews.
In order to reach its capital requirements, the bank has/will be forced to sell all its overseas assets, of which the most lucrative being Zachodni. With €3.1b in the bank, the government will no doubt point to the fact that this saves the taxpayer putting in a similar amount. Presumably selling their stake in M&T and some of the UK assets will be looked upon in the same way.
But this is going to leave AIB short, well short, and don't even think that this bank is going to outdo BoI and raise a few billion in a rights issue. So.not.going.to.happen. The end result will be a major capital injection from the State and thus nationalisation, the 4th of the 6 lending institutions under this governments disastrous banking strategy.
And here's the rub. While unlike Anglo and INBS we get a return for our investment in terms of a stake in a functioning bank, when we do decide to sell AIB, it will be as a provincial backwater bank in a depressed and non-functioning economy. The 'international' part having being sold off as a fire sale in 2010 to suit the policy of the government through their financial regulator. Some sale that will be.
Way to go Brian. Another monumental cock-up screwing the taxpayer because you can't see outside the box, that's if you can see the box at all.