Allied Irish Banks PLC Chairman Dan O'Connor said Wednesday that selling its U.K. and Polish businesses and its stake in Buffalo's M&T Bank Corp. will meet a "substantial" part of its capital needs but added that a regulator's capital targets are "demanding."

It has already received $4.6 billion in a government recapitalization in return for, in effect, a 25% stake, that will help it offset bad debts. It also must raise about $9.6 billion before yearend or face a further capital injection from the state.

Allied Irish said it will get "substantial" proceeds from the sale of its 70.5% share in Poland's Bank Zachodni/WBK and its 23.2% stake in M&T, plus the sale of its U.K. businesses, which include 48 First Trust retail bank branches in Northern Ireland.

M&T has a total market value of about $10.3 billion.

Referring to the Polish unit, O'Connor said, "I have no desire to sell that bank. It kills me to sell that bank, but it has to be sold."

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