ALBK.L Regulatory News (ALBK)

22 Feb 2008 07:00

Allied Irish Banks PLC22 February 2008 For Immediate Release 22 February 2008 AIB to acquire interest in Bulgarian American Credit Bank AD Allied Irish Banks, p.l.c. ("AIB") (NYSE: AIB) has entered into an agreement toacquire a 49.99 per cent interest in Bulgarian-American Credit Bank AD ("BACB"or the "Company") from its majority shareholder the Bulgarian-AmericanEnterprise Fund ("BAEF"). BACB is a specialist provider of secured finance tosmall and medium sized companies in Bulgaria. BAEF is a private U.S.corporation established in 1991 under legislation enacted by the U.S. Congressto promote active participation in the development and expansion of the economyin Bulgaria. BACB was established in 1996 and listed on the Bulgarian Stock Exchange in March2006. Today, it is an established brand name with a strong management team anda proven track record of profit growth. Headquartered in Sofia, Bulgaria, BACBhas four offices in key regional cities and a network of mobile lendingconsultants who cover a further 15 cities. The Company has 137 employees. AIB is Ireland's leading banking and financial services organisation. Itoperates principally in Ireland, the United Kingdom, the United States andPoland. In Poland, AIB has a 70.5% shareholding in BZWBK which has over 380outlets mainly in the mid-west and south-west of the country. AIB also has a24.3% stake in M&T Bank, one of the top regional banks in the US. For moreinformation visit www.aibgroup.com The consideration payable by AIB is €216 million which shall be satisfied by wayof cash on completion of the transaction. Completion is conditional upon receiptof the requisite regulatory approvals. The transaction is expected to bemarginally EPS accretive for AIB and will have a minimal capital impact. AIBwas advised by AIB Corporate Finance Limited and BAEF was advised by UniCreditMarkets & Investment Banking acting through CA IB Corporate Finance Limited. Based on the unaudited consolidated financial statements released by BACB forthe year ended 31 December 2007, the Company earned a net income of €27 millionand had total assets of €358 million and shareholders' equity of €80 million atthe year end. Return on average equity was 39.7% and the cost-to-income ratiowas 15.5%. In 2007 BACB had a record year as the bank continued to broaden andstrengthen its participation in the SME sector, which is benefiting from EUaccession, continuing foreign direct investment and accelerated structuralspending. All of this has contributed to Bulgaria having one of the best growthstories in the region. In January 2008 Standard & Poor's affirmed the BACB'scredit rating - BB/Stable/B. For five years in a row, including 2007, BACBreceived Finance Central Europe's achievement award for Best Bank in Bulgaria byreturn on equity and also return on assets. Commenting on today's announcement, Frank Bauer, CEO of BACB, said that "Bulgaria's success in large part has been fueled by the SME sector in which BACBis a driving force. As a result of BACB's clear strategy, with its emphasis oninnovation and client service, the bank consistently has been the mostprofitable bank in Bulgaria. We believe that, as a new strategic investor, AIBwill bring the same high standards of entrepreneurial and operationalexcellence. The combination should benefit everyone - clients, employees,management and shareholders - indeed, this is a great day for everyone." Eugene Sheehy, CEO of AIB said: "This investment is part of AIB's strategy forCentral and Eastern Europe which involves acquiring and investing in businessesat reasonable valuations in targeted high growth markets and which operate inareas where AIB has core expertise (in this case, SME lending). BACB represents an exciting growth opportunity for AIB and we look forward toworking with the excellent management team who have built up the business. Webelieve that AIB can add significant value to the business in the future". -ENDS- For further information, please contact:Alan Kelly Ronan SheridanGeneral Manager, Group Finance Group Press OfficerAIB Group AIB GroupBankcentre BankcentreDublin 4 Dublin 4Tel: +353-1-6412162 Tel: +353-1-6414651 This information is provided by RNS The company news service from the London Stock Exchange