POLAND’S FINANCIAL regulator KNF is to investigate whether AIB’s sale of Bank Zachodni WBK to Spain’s Banco Santander was conducted in line with Polish law and whether there were any irregularities in the transaction.
The regulator will examine Santander’s deal to buy the Irish bank’s 70 per cent stake in BZ WBK to see if confidential information was exchanged in advance.
KNF said there had been some concerns raised about the transaction and that, as was normally the case on such transactions, the regulator would examiner whether confidential information such as results forecasts was revealed to potential buyers.
“The questions are being examined in a supervisory mode. The parties of the transaction will be investigated about the information flow,” said a spokesman for KNF, Lukasz Dajnowicz.
AIB defended the transaction, saying it was “conducted in an entirely appropriate manner” and any suggestion of irregularity was “without foundation”.
The bank said it had not been informed by the Polish regulator of any intention to investigate the sale but that it would co-operate.
Minister for Finance Brian Lenihan also defended the transparency of the sale process.
“I am sure all the proper procedures had been followed. It is a demonstration of the confidence in Allied Irish and in the market that they got such a high sum. It is money that talks here,” he said.
A spokeswoman for the KNF said the investigation would be the standard inquiry followed after such a transaction in Poland. “If irregularities were found, we will proceed to further inspection which would depend on the type of irregularities,” she said.
AIB agreed to sell the majority stake in BZ WBK and its 50 per cent share of its Polish asset management business for €3.1 billion.
The transaction will boost the bank’s capital reserves by €2.5 billion, raising one-third of the €7.4 billion the bank requires before the end of the year under the Financial Regulator’s new rules.
KNF must approve Santander’s takeover of the Polish bank, which analysts expect to take several months to reach completion.
PKO Bank Polski, Poland’s biggest bank, which is 51 per cent owned by the Polish government, and French bank BNP Paribas were the successful underbidders.
PKO ran an extensive lobbying campaign supported by the government in an attempt to bring the country’s third-largest bank back into domestic ownership.
Colm Doherty, managing director of AIB, told The Irish Timeslast week the bank sold the Polish businesses in the best deal on offer with the best structure where Santander will tender for the entire stock in the bank: "We sold the business to the highest bidder with the best bid."
PKO and BNP Paribas are understood to have tendered offers within a percentage point of the €2.9 billion agreed for the 70 per cent stake of BZ WBK and €150 million for AIB’s stake in the asset management firm.
AIB received about €500 million more than for BZ WBK than the price generally expected by financial analysts. The bank is expected to generate between €2 billion and €2.5 billion in capital from the sale of its stake in US bank MT and the bank’s UK division, which includes First Trust Bank in Northern Ireland.
KNF said it would consider Santander’s financial condition in the context of Spain’s, the spokeswoman said, and Santander’s offer for the remaining shares in BZ WBK could not be lower than the 227 zlotys a share it agreed to pay AIB. BZ WBK shares closed 9.7 per cent higher at 214 zlotys, while shares in AIB rose 4.8 per cent, or 3.6 cent, to 78 cent. – (Additional reporting: Reuters)
