AIB has refused to comment on reports that its Polish subsidiary, WBK, is in negotiations with Credit Suisse First Boston (CSFB) to acquire the investment bank's local brokerage arm.

It was reported yesterday that WBK was seeking to purchase the CSFB brokerage company in an attempt to grow its institutional business in Poland.

A WBK spokesman was quoted as saying talks between the two institutions were "going in the right direction".

An AIB spokeswoman in Dublin declined to discuss the possibility that WBK was planning to expand its brokerage presence through acquisition.

The Polish bank already owns a broking firm aimed at smaller investors. Estimates suggest that a combined entity would control about 10 per cent of the fragmented Polish brokerage market.

AIB maintains a majority shareholding in WBK, which was created last year through the merger of the Irish bank's two Polish units. Its market value currently stands at $1.5 billion.

Analysts said the CSFB brokerage deal, if completed, would be "very small" in the context of AIB's overall operations. They added however that it could help WBK to grow its business in the face of poor economic conditions in Poland. WBK recently reported a 3 per cent drop in deposits held in its 400-strong branch network.

"Most banks are keen to boost fee-based income," said Mr Scott Rankin of Davy Stockbrokers.

A spokesman for CSFB was also reluctant to comment on the report. It is, however, the stated intention of CSFB's Swiss owner, Credit Suisse, to reduce costs in the investment bank, which reported a net operating loss of $255 million (€241 million) in the third quarter of last year.

The company launched an initiative last October aimed at saving $500 million. - (Additional reporting, Reuters)