AIB is on track to raise some required fresh capital through disposals but may struggle to minimise state ownership by selling in an uncertain market, Ireland's head of banking supervision said today.
AIB needs to raise €7.4 billion and plans to sell its UK business, its majority stake in Poland's Bank Zachodni WBK and a minority stake in M&T Bank in the US.
'We are confident AIB is on track to meet its disposal target - the issue is around the valuation of those disposals,' Jonathan McMahon, the assistant director general for financial institutions at the Central Bank, told reporters.
'There is some uncertainty around that at the moment and clearly the amount of Government support will in part depend on their ability to realise those assets to the value they think they can,' he said.
The Government may still have to take majority ownership of AIB even if its sells some of it profitable overseas units.
McMahon also said that he was confident Irish banks would be able to withstand any continued market woes, and exposures by any institution to the euro zone's troubled debt spots gave the regulator no cause for concern.
