ALLIED Irish Banks has won the competitive tender to acquire 20 per cent of the Polish bank Weilkopolski Bank Kredytowy (WBK). AIB will pay the Polish government £38 million for 13,763,200 shares.
The latest purchase will bring AIB's stake in the WBK to 36.3 per cent. In addition, AIB has an option to acquire the 23.9 per cent of WBK held by the European Bank for Reconstruction and Development (EBRD). This option can be exercised up to January 31st, 2000.
AIB is paying two times book value for the regional bank which has 49 full branches and 14 sub branches and over 4,000 employees. The price is 6.4 times the Polish bank's earnings per share.
WBK, which is quoted on the Polish stock exchange, reported pre tax profits of £48.25 million for 1995. The bank had total assets of £997 million at the end of December 1995 and net assets of £93 million. AIB's total 3,6.3 per cent stake has been acquired at a cost of £50.7 million.
The Polish government is retaining a 5 per cent stake in the bank. The second tender offer for the government stake in WBK closed at the beginning of April.
AIB's successful bid for the full block indicates that the bank is likely to exercise its option to buy the EBRD stake.
Director of AIB European Investments Mr David McCrossan said that, while employment was high at WBK "by European standards' "there were significant opportunities to expand income and productivity at the bank.
