Bank of Ireland shares soar amid consolidation speculation

ISEQ: 2,374 (-64) at 1.31pm: With speculation about imminent structural reform of the Irish banks swirling around the market financial shares endured a mixed days trading.

At 1.31pm the Iseq index was up 2.7 per cent at 2,374 a gain of 64 points.

Leading the way up was Bank of Ireland shares which were 19.8 per cent higher at €1.21, with 4.2 million shares traded.

The shares received a mid-morning boost when the bank confirmed it has received "unsolicited approaches" from parties wishing to make an investment in the group.

"No decision on these approaches has been made. Bank of Ireland will keep its stockholders informed as appropriate."

One theme to have emerged from the discussions between the Minister for Finance Brian Lenihan and senior executives from the six banks covered by the Government guarantee scheme is consolidation among the banks.

Reports suggest the most likely scenario is the emergence of two banking groups built around AIB and Bank of Ireland, the two largest banks.

In a related development Irish Life and Permanent released a statement saying it was in talks with EBS Building Society about ways the two financial firms "might work together.''

Shares in Irish Life and Permanent were almost 2 per cent lower at €1.12 this afternoon. AIB shares were marginally ahead at €2.17 while Anglo Irish Bank shares were 7 per cent lower at 85 cents.

Negative employment data from the Central Statistics Office had little impact on consumer stocks, brokers said, noting that such negative sentiment was already priced in.

C&C group was off 4.6 per cent at €1.12, Fyffes was 3.7 per cent lower at 25 cents while FBD was 2.5 per cent down at €7.80.