B of I reviewing future of loss-making Chase de Vere

Bank of Ireland is expected to make a decision on the future of its UK financial advisory firm Chase de Vere within the next few months. The bank may sell the company, which has been losing money for the past few years.

It was reported yesterday that Bank of Ireland had engaged KPMG to advise it on its options for the subsidiary. A spokesman for Bank of Ireland confirmed that a review of Chase de Vere had begun.

He said it had been a "difficult time" for the company, which was fined £165,000 (€246,821) by UK financial regulators last year for misleading customers during a promotion for one of its investment products.

The spokesman said the review would cover all options for the UK subsidiary, including its sale.

It is understood that the review began under former Bank of Ireland chief executive Mr Michael Soden and has been taken up by his successor, Mr Brian Goggin.

Chase de Vere, which employs about 500 staff, was bought by Bank of Ireland four years ago. The business was merged with another loss-making Bank of Ireland business, MX Financial Solutions, in 2003.

Analysts said yesterday that a sale of Chase de Vere would have a limited effect on Bank of Ireland's financial position. Mr Seamus Murphy, of Merrion Stockbrokers, pointed out that the £195 million Bank of Ireland had paid for the constituent parts of Chase de Vere had already been written down in group accounts.

He said, however, that the disposal of the firm would be "encouraging". The disposal would free up management time to deal with the bank's other UK businesses, he said.

Bank of Ireland has formed an alliance with the UK Post Office to sell financial products through the Post Office's 16,500 outlets.

The bank's governor, Mr Laurence Crowley, told shareholders this week that initial indications for this business were positive.