Indications are that AIB's subsidiary, Bank Zachodni, has turned a corner and will almost double its contribution to group profits in 2002. Media reports in Poland this week suggested that net profits at the Warsaw-based bank would rise to more than 310 million zloty (€75.4 million) for 2002, up from 152.4 million zloty in the previous year.
The bank would not comment on this speculation, but Davy Stockbrokers has forecast that profits at Bank Zachodni will rise from €27 million to €60 million in 2002.
The truth will be known next month when AIB will announce its full-year figures in February, including the contribution from Poland. If the speculation turns out to be correct, it will be a further boost for AIB, which has put its troubles behind it in the US, with the sale of Allfirst to M&T expected to be given regulatory approval in March.
This week Commerzbank issued a "buy" recommendation for the stock, highlighting the relative attractiveness of the bank over its UK peers. The key difference is its exposure to the still-expanding Irish economy. Commerzbank also suggests AIB faces lower risks in terms of house price deflation and consumer indebtedness than UK banks. Irish brokers increasingly favour Bank of Ireland over AIB.
