Which Financial Institution most likely to Merge or Acquire with BOI or AIB

jb2008

Hey guys, i know these two financial institutions are perfroming well over the last few years but with the trend of mergers and acquisitions in the banking industry it is not entirely out of the question to think that one of the larger financial institutions in the world would make a move for one of the Irish banks. Personally i think the most likely acquirer would be Banco Santandar as they have a very agressive acquisition strategy at the moment and they are in most of the EU countries but have no presence in Ireland.

So my question to you is.

Out of the two AIB and BOI which do you believe is most likely to be acquired and why ?

And depending on who you choose AIB/ BOI, which major financial institution do you believe would be most likely to acquire the Irish bank and why ????

Ill be very interested to see some answers

stepbar

I'm going to say BOI. Look at the two - AIB recently spent €216 mil on a near half share in a bank in Bulgaria. In addition they spend €40mil on AmCredit last year. They also have a presence in Poland and the US through a share in M&T bank. They seem to be really targeting the emerging EU countries in order to to grow the business. They also seem to be pushing the IT platforms hard as well. I believe plans are a foot to radically change their core banking systems - http://www.ibm.com/news/ie/en/2008/01/ie_en_news_20080116.html. If anything AIB are going places and paving the way for a pan european bank.

On the other hand BOI have concentrated on organic growth within existing businesses. TBH what we are seeing being played out is a drawn out conservative strategy (true to BOI form). I think BOI is most vulnerable to a take over. Who could pull it off? Well, you mentioned one bank Banco Santandar, who own the Abbey in the UK. Perhaps it would be a nice fit, logic being that in the UK, BOI have concentrated on Business Banking and Mortgages. Abbey is not a Business Bank. There could be scope to integrate both businesses together. How this could be done I don't know. In Ireland, I think it would be commercial suicide to mess with the Bank of Ireland brand.

The only other banks I could think of would be HSBC (there was speculation last year), Barclays and Royal Bank of Scotland. However if RBS were to launch a takeover (highly unlikely) it would be subject to clearance from the competition authority (due to RBS owning Ulster Bank). Anyhow, RBS have bigger fish to fry with their recent takeover of ABN Amro. That leaves Barclays. Not sure how eager they would be as they have never displayed any interest in the Irish market prior to this. Can't comment for any of the French banks, however I highly doubt it that they would be interested in an Irish bank.

If Bank of Ireland plans to remain independent in the long term, it desperately needs to buy a branch network in the UK to complement their business banking and mortgage businesses in the UK (that's assumed that the strategy is to organically grow in the UK). It was a piss poor decision to close the amount of branches they did a number of years ago. I think a merger with a similarily sized bank in the UK would do the trick. BOI had the right idea when he tried to merge with Allience & Leicester back in 1999 and Abbey National back in 2002. It's a pity they made a pure balls of it.

ballooba

A certain UCD economist believes the two will be nationalised when their loan books collapse.