BIDDERS IN the race to buy the 70 per cent stake held by Allied Irish Banks in Poland’s Bank Zachodni WBK expect the Irish bank to agree on a preferred bidder early next week.
Final offers have been requested from Poland’s largest lender PKO Bank Polski, Spain’s Banco Santander and France’s BNP Paribas for submission by the end of this week, according to a source close to one of the parties, with AIB expected to name a preferred bidder next week.
The approaching deadline has led to more intense lobbying by the banks.
Poland’s deputy treasury minister Krzysztof Walenczak will visit Ireland today to discuss PKO’s offer for BZ WBK. The Polish government has already backed PKO as its preferred buyer for the Polish bank.
Representatives from Santander and BNP Paribas are understood to be meeting Poland’s treasury department this week in an attempt to push their offers for BZ WBK. BNP met the Polish treasury minister on Monday in a meeting described in the local media as “lacking in chemistry”.
Offers are thought to have been made in the range of €2.7 billion and €2.9 billion for AIB’s stake in BZ WBK, which is the third largest retail bank in Poland.
A spokeswoman for the bank declined to comment. The bank’s managing director Colm Doherty said last month that AIB hoped to have a deal agreed for BZ WBK by the end of this month.
Shares in AIB closed 1.3 per cent, or 1 cent, higher at 78 cent, valuing the bank at €688 million.
AIB is selling the Polish bank, its 22 per cent stake in US east coast bank MT and its UK business in an attempt to raise part of the €7.4 billion target set by the Financial Regulator. The bank has to meet a deadline of the end of this year to raise the capital to cover rising loan losses.
PKO’s offer is being supported by the Polish authorities who are keen to recover domestic ownership of the third-largest retail lender in a banking system dominated by foreign players.
The purchase of AIB’s stake in BZ WBK would lead PKO’s share of the banking sector rising to 19 per cent and just over 30 per cent of the Polish retail banking market.
Poland’s government has come under political pressure over the shortage of credit in the local economy throughout the banking crisis due to the large presence of overseas banks in the market.
PKO has argued that its offer is likely to be approved more quickly by Poland’s financial regulator given that it is 51 per cent owned by the State and its bid has the backing of government.
The bank has claimed that the Polish regulator has indicated that it would approve PKO’s purchase of the AIB stake in BZ WBK within three months of a deal being agreed. A source close to PKO pointed out that it took 10 months for the regulator to approve Santander’s recent purchase of Polish businesses owned by troubled US insurer AIG and about 18 months for the 2009 merger of Fortis Bank Polska and Dominet Bank to be approved. “There is economic value in a speedy transaction,” the source said.
The Irish regulator has acknowledged that the sale of AIB’s Polish business may take time as it awaits regulatory approval but it will allow AIB to agree a deal in principle by the end of the year as part of its recapitalisation plan.
A spokesman for the Polish regulator, KNF, said the timing for the approval of the BZ WBK purchase depended on “the buyer’s efficiency in providing all relevant information”. The regulator was not opposed to another foreign buyer taking over AIB’s stake, he said. “It’s not about being ‘foreign’ or ‘domestic’.”
The regulator would assess the buyer’s “credibility and quality of risk management” when assessing whether to approve AIB’s preferred offer.
“Receiving state aid or the accuracy of investment decisions verified during the recent crisis or group’s operations in host jurisdictions has to be taken into account, among other things,” the spokesman told The Irish Times.
