BZ WBK "well insulated" from parent AIB's troubles

Bank Zachodni WBK (BZ WBK), the Polish unit of Allied Irish Bank, said yesterday it would not be impacted by its parent's $750 million loss caused by a suspected rogue trader in the US. "Bearing in mind the current situation I'd like to emphasize that AIB is a well-capitalized bank with a strong financial position," AIB Poland chairman Gerry Byrne said in a statement, adding, "These events do not affect the activities either of AIB in Poland or the development of BZ WBK." Analysts agree that BZ WBK, Warsaw's number five listed bank, is well insulated from the crisis and say any temporary weakness in its stock offers an entry opportunity after spectacular gains since its merger last year. The stock is up 12% this year, valuing BZ WBK at nearly $1 billion. AIB owns 70.5% of BZ WBK, but analysts insist the huge losses, believed hidden by US trader John Rusnak at AIB's Allfirst unit in Baltimore, are not the reason for the recent easing of BZ WBK's share price. "This share has rallied extremely strongly in recent weeks and has been easing in the past few days," said Artur Szeski, an analyst at brokers CDM Pekao SA. "The AIB news is not the main reason for the fall. Maybe it's a minor contributing factor," he added. (Reuters)