Allied Irish Banks sells stock brokerage to Fexco for euro24M ($31.5M) in latest asset sale move

By Shawn Pogatchnik, AP
Monday, September 20, 2010

Allied Irish selling stockbroker to Fexco for $32M

DUBLIN — Debt-struck Allied Irish Banks is selling its share-dealing unit, Goodbody Stockbrokers, to Irish financial services company FEXCO for €24 million ($31.5 million), both companies announced Monday.

The all-cash deal represents the latest effort by Allied Irish to meet an Irish regulatory requirement to drum up at least €7.4 billion ($9.7 billion) by the end of the year or face government nationalization. Goodbody is the largest stock brokerage in Ireland.

Earlier this month Allied Irish announced the €3.1 billion sale of its 70 percent stake in Bank Zachodni of Poland and other Polish interests to Spain’s Banc Santander. Allied Irish still is negotiating with several international bidders over expected sales of its British retail banking division and its 23 percent stake in M&T Bank Corp. of New York.

The planned sales would effectively return Allied Irish to a company exclusively based in the Republic of Ireland, which is struggling to combat recession, a surging deficit, a burst property bubble and rising unemployment.

Allied Irish also is planning to try to raise about €3 billion later this year by issuing new shares to existing shareholders including the government, which already is the bank’s biggest shareholder.

Nonetheless, many analysts expect Allied Irish to fall short of regulators’ cash requirements and become majority-owned by the government.

The planned share flotation and growing government stakeholding have helped to depress shares in Allied Irish. It once was Ireland’s biggest-value company until the country’s runaway property market went sharply into reverse in 2008, collapsing a central pillar of the economy.

Allied Irish shares fell 1.1 percent to 61.3 cents. Shares in Ireland’s other two publicly listed banks, Bank of Ireland and Irish Life & Permanent, rose.

Privately owned FEXCO, based in rural County Kerry in southwest Ireland, began life in 1981 as a foreign-exchange specialist but has broadened its reach to a wide range of financial and customer-service fields. It employs about 1,400 people, mostly in Ireland, and has operated its own stock-brokerage division since 1996.




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