AIB’s new interim executive chairman has today told shareholders he is fully focused on taking actions needed to secure a better future for the bank.
David Hodgkinson said the future was challenging and the bank would have to change but that he and his colleagues would be formulating a plan to repair its weaknesses.
He was speaking at an extraordinary general meeting at AIB headquarters in Ballsbridge today, where AIB is seeking approval from shareholders for the sale of its 22 per cent stake in US lender M&T.
The transaction, which was underwritten by Morgan Stanley and Citigroup, will generate a capital gain of €900 million for AIB, according to analyst estimates.
The bank last month completed a public offering of 26.7 million notes, a 22.4 per cent share in the bank, at a price of $77.50 each which will be converted into shares in M&T. The meeting began at 11am.
In addition to the €2.5 billion gain on the disposal of Polish subsidiary Bank Zachodni, AIB’s sale of the M&T stake leaves €7 billion to raise to meet the capital target of €10.4 billion set in September by the Financial Regulator.
AIB has said that €5.4 billion of this will be raised through a sale of new shares at 50 cent a share, underwritten by the State, and has projected a further €5 billion from the disposal of assets.
The Government has committed up to €3.7 billion through the right issue, on top of the €3.5 billion injected into AIB last year. This is likely to raise the State’s shareholding in AIB to more than 90 per cent from 18.6 per cent.
AIB also announced today that group managing director Colm Doherty had formally stepped down from its board. The bank announced on September 30th that Mr Doherty would leave before the end of the year.
Mr Hodgkinson, a former chief operating officer of global bank HSBC, was appointed to replace former chairman Dan O’Connor last week. He said he would recieve €500,000 in remuneration if he stayed in the position for a full year as well as expenses for accomodation.
He offered his gratitude to the Government and taxpayers for "the key role" they have played in helping AIB deal with the "unprecedented events" it has encountered.
Mr Hodgkinson said AIB had an extremely strong franchise and played a vital part in the country's infrastructure through its support for business and personal customers.
However, he said the bank faced a challenging future.
"The sales of the Group's Polish interests and its stake in M&T, which is the focus of today's EGM, have already been announced and more work needs to be done on reshaping and rebuilding the business to ensure stability," he said.
"My task therefore, along with my colleagues, is to formulate and implement a plan of action which will build on AIB's strengths and repair its weaknesses – a plan which will restore AIB to being a leading force both as a business and an employer."
Shares in AIB gained 3.2 per cent this morning and stood at €0.35 at 1.25pm.
