Irish bank AIB sells Polish assets to Santander

10th September 2010, Comments 0 comments

Troubled Irish bank AIB said Friday that it had agreed to sell its Polish banking assets to Spanish lender Santander for 3.1 billion euros (3.9 billion dollars) in cash.

"The Board of Directors of Allied Irish Banks today announces that it has agreed to sell its interests in Poland for a total consideration of approximately 3.1 billion euros," AIB said in a statement.

Santander agreed to pay 2.9 billion euros for AIB's 70 percent stake in Poland's Bank Zachodni WBK (BZ WBK) and 150 million euros for AIB's 50 percent stake in BZ WBK AIB Asset Management.

AIB made a pre-tax loss of 2.66 billion euros in 2009, as bad loans soared.

Ireland's government meanwhile plans to purchase 81 billion euros of soured property loans from the country's troubled banks by February, the head of the National Asset Management Agency (NAMA) said Friday.

The toxic loans, stemming from the 2008 collapse in world property prices, will be placed in the NAMA, which is considered a "bad bank" and which won approval from the European Commission earlier this year.

"At the moment we're in the middle of the storm but by February of next year, NAMA will have reviewed, valued and acquired 81 billion euros (103 billion dollars) worth of problem loans," NAMA chief executive Brendan McDonagh said in a statement.

"That is key to (the banks) speedy return to lending to the real economy and the key to us drawing a line under the cost of the bank rescue scheme."

The announcement comes in the same week that Ireland's government said it planned to split state-rescued Anglo Irish Bank into two banks, with one half eventually being sold or wound down, in the hope of satisfying the EU.

Anglo Irish will be split into a so-called Funding Bank and an Asset Recovery Bank. The former will guarantee deposits, while the state will seek to offload the latter.

Anglo Irish last week reported a pre-tax loss of 8.2 billion euros in the six months to the end of June, on top of 12.7 billion euros for the whole of 2009, the biggest-ever losses in Irish corporate history.

Ireland became the first eurozone member country to plunge into recession, in the first half of 2008, slammed by the global financial crisis, a domestic property market meltdown and soaring unemployment.

However, the country stormed free of recession in the first quarter of this year, recent official data showed. And official figures published on Thursday showed Ireland had emerged from a lengthy period of deflation, or falling prices, as consumer prices rose in the year to August.


© 2010 AFP

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