AIB looks for more acquisitions

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The Independent Online
Allied Irish Banks is planning further acquisitions in the regional US banking market and is continuing to study purchases in the UK, the group said yesterday.

Eamon McElroy, general manager of AIB Britain, said the bank had watched the process of high street consolidation closely but, having failed to acquire a building society, he felt "the opportunities are slipping in terms of price and attraction".

AIB is, nevertheless, looking for other UK operations, including life assurance and fund management, but "no one should be holding their breath," he added.

Neil Dean, chief financial officer, said the US was a particularly attractive market with compound growth of 80 per cent since 1983, when AIB purchased First Maryland Bancorp.

The Irish bank's US operations yesterday reported half-year profits 14 per cent higher at Irpounds 57m (pounds 59m), with group pre-tax profit for the latest half year up by the same percentage to a record Irpounds 201m.

Mr Dean said: "We will keep our franchise in the belt from southern Pennsylvania to northern Virginia." Following its success in Maryland, AIB plans to set up strong local banks.

AIB, Ireland's highest capitalised stock market company, said it was optimistic that the second-half results would outstrip last year's.

''We are confident that our profit performance in the rest of 1996 will exceed that achieved in the second half of 1995. With a favourable economic background in the Irish, UK and US economies, underlying business trends continue to be positive," James Culliton, the chairman, said.

In Ireland, buoyant lending volumes more than compensated for a fall in margins, and the US and capital markets divisions also achieved strong growth, AIB said.

But Mr Culliton warned that lending growth could slow in Ireland. "We expect continuing strong loan demand although at a lower level than the first half." AIB said the integration of fund manager John Govett was going well.