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AIB Sells Polish subsidary for €3.1b and becomes backwater bank


Malbekh

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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 ****-up screwing the taxpayer because you can't see outside the box, that's if you can see the box at all.
 
Last edited:

paulp

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What would be good price for Zachodni? How much of a discount is be applied by the firesale?
 

captainwillard

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The OP is setting the tone for the thread. A mere statement of the fact that the Polish unit had been sold would have sufficed.

What view do you want us to take on this thread Malbekh? Presumably all comments should be highly critical of AIB.
 

Touché

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What would be good price for Zachodni? How much of a discount is be applied by the firesale?
Seems like a good price, Peter Matthews (although against the sale)reckoned it would fetch 2.9 billion
 

Malbekh

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What would be good price for Zachodni? How much of a discount is be applied by the firesale?
Jim Power reckoned about €1b less than at some stage in the future. There's also the issue about the bank adding to the bottom line because it is so profitable and that Poland is doing relatively well, certainly compared to us.


Critically from my point of view, it will be very hard for the government to sell its stake in AIB without an international component like Zachodni.
 

Malbekh

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The OP is setting the tone for the thread. A mere statement of the fact that the Polish unit had been sold would have sufficed.

What view do you want us to take on this thread Malbekh? Presumably all comments should be highly critical of AIB.
AIB at the end of 2010 will be a backwater provincial bank. Statement of fact. Please prove otherwise....

I don't need to criticise the bank. I am criticising moronic governmental policy
 

captainwillard

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AIB at the end of 2010 will be a backwater provincial bank. Statement of fact. Please prove otherwise....
Your OP and title sets a tone for future commentary on the thread. It is unprofessional and partisan. Whether I agree or disagree with this view is not really the issue. What grates with me is your insistence on setting the tone in the thread right from the start.
 

Malbekh

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Your OP and title sets a tone for future commentary on the thread. It is unprofessional and partisan. Whether I agree or disagree with this view is not really the issue. What grates with me is your insistence on setting the tone in the thread right from the start.
But you fail to address my question. Is it factually incorrect?
 

goosebump

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Way to go Brian. Another monumental ****-up screwing the taxpayer because you can't see outside the box, that's if you can see the box at all.
What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?

Lenihan isn't trying to make a fast buck here.

He's trying to separate the Irish tax payer from the Irish banking system as quickly and as prudently as possible.

If there's €3.1bn on the table that saves us €3.1bn in recapitalisation costs, then snap it up.

A bird in the hand, as they say.
 

captainwillard

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But you fail to address my question. Is it factually incorrect?
Ok hear this. A big European or Canadian bank which takes a very long view on the world economy might want a strategic holding in an Irish bank. AIB, in its future guise might satisfy the criteria for such a company.

You fail to address my concerns. You gave me your answer on the OP and this answer handed to me that the bank is now a backwater. I disagree. The only fact is that the Polish asset has been sold. Everything else is a matter of opinion.

I expect better from you as you are one of the best posters on p.ie.
 

Malbekh

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What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?

Lenihan isn't trying to make a fast buck here.

He's trying to separate the Irish tax payer from the Irish banking system as quickly and as prudently as possible.

If there's €3.1bn on the table that saves us €3.1bn in recapitalisation costs, then snap it up.

A bird in the hand, as they say.
Back in the box with Brian, goose.
 

Touché

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What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?

Lenihan isn't trying to make a fast buck here.

He's trying to separate the Irish tax payer from the Irish banking system as quickly and as prudently as possible.
then snap it up.

A bird in the hand, as they say.
I agree, Peter Matthews doesn't, I reckon Aib/Lenihan are workin to Eu instructions to sell but if history has taught us anything,we need to grab this money
 

hmmm

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That's a great price, 2.9 was the highest figure I saw mooted. I don't think a future investor will care whether AIB has or doesn't have an international dimension, all the parts of the bank would be valued separately anyway as the synergies (yes I used that word) were probably limited.
 

captainwillard

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That's a great price, 2.9 was the highest figure I saw mooted. I don't think a future investor will care whether AIB has or doesn't have an international dimension, all the parts of the bank would be valued separately anyway as the synergies (yes I used that word) were probably limited.
Your answer is not on message. Be warned.
 

Dreaded_Estate

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What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?

Lenihan isn't trying to make a fast buck here.

He's trying to separate the Irish tax payer from the Irish banking system as quickly and as prudently as possible.

If there's €3.1bn on the table that saves us €3.1bn in recapitalisation costs, then snap it up.

A bird in the hand, as they say.
Lowers the recap by about €2.5bn goosebump.
 

Malbekh

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Your answer is not on message. Be warned.
Witty. We like witty.

Back on topic, why do I feel like I'm in Invasion of the Bodysnatchers? You guys don't get it, do you? D_E? Anyone?
 

Cassandra Syndrome

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So will they still be welfare spongers at the end of the year in order to stay afloat and also meet the tier 1 rules (which are being tightened further btw)? Yes.

These parasites enjoyed capitalism on the way up and expect and indeed received socialism on the way down.

Thankfully people in general are refusing their stinking credit. We should set up our own banks and let the vermin sink. We know how to fish, we can live for a lifetime.
 

RightCentreLeft

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What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?

Lenihan isn't trying to make a fast buck here.

He's trying to separate the Irish tax payer from the Irish banking system as quickly and as prudently as possible.

If there's €3.1bn on the table that saves us €3.1bn in recapitalisation costs, then snap it up.

A bird in the hand, as they say.
:lol:

You crack me up sometimes goosebump:lol:
 

stanley

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Jun 20, 2007
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Wonder if the top AIB lads have a bonus scheme in place for the successful sale either here or over there, did any of them hold shares in the Polish outfit.

Will this mean staff transferring to the Polish bank or will staff be let go back in Dublin who looked after the investment.
 

DCon

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What perverse logic.

What are you suggesting? That the taxpayer dumps another €3.1bn into AIB on the promise of some deal that may or may not yield a return in the future?
Kind of like NAMA you mean?
 
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