Allied Irish Banks raises pounds 55m in move to double market share (CORRECTED)

CORRECTION (PUBLISHED 10 DECEMBER 1993) APPENDED TO THIS ARTICLE

ALLIED Irish Banks is making a Ir pounds 57.84m ( pounds 55.6m) one-for-one rights issue to expand its lending and treasury activities in Ireland and the UK, writes John Willcock.

AIB intends to double its market share over the next five years through organic growth and the acquisition of suitable loan portfolios.

The bank said it would continue to concentrate on the lending with which it had been successful in the past - solid secured lending to the middle market and professional sectors.

By increasing capital resources to more than Ir pounds 140m the bank plans to reduce the cost of funds and broaden their source.

The directors also believe that the increased equity base will encourage more credit rating agencies to rate the bank.

The rights issue is not aimed primarily at helping AIB's other main strategy - buying more banks on the east coast of the US, which has proved a success with First Maryland Bancorp.

Allied Irish Banks is issuing 121,675,649 new ordinary shares of Ir25p each at Ir50p per share.

The rights issue has been underwritten by AIB Capital Markets and Paribas Capital Markets. The financial advisers to the rights issue are Goodbody Corporate Finance and the stockbrokers are Goodbody Stockbrokers.

Sean FitzPatrick, managing director, said: 'This funding will facilitate a strong but measured growth for the bank over the coming three to five years.

'We will continue to concentrate our resources on growing the assets in our core activities in a prudent controlled fashion.'

CORRECTION

Yesterday's report on Anglo Irish Bank Corporation's Ir pounds 57.84m rights issue mistakenly referred to the company as Allied Irish Bank. Anglo Irish Bank is raising the money to fund expansion of its treasury and lending activities in Ireland and the UK.