AIB completes purchase of Goodbody Stockbrokers

AIB said on Wednesday it has completed the takeover of Goodbody Stockbrokers, after receiving all necessary regulatory approvals.

Goodbody also confirmed the appointment of Martin Tormey, who has worked with the group for the past 25 years and been director of strategic business development since 2014, as its new chief executive. He succeeds Roy Barrett, who had led the group for a quarter of a century.

The new head will report to Cathy Bryce, managing director of Capital Markets in AIB .

“Now that the transaction is complete, AIB and Goodbody will work together to accelerate the growth of the combined business,” said AIB chief executive Colin Hunt. “AIB will combine Goodbody’s expertise with its own existing experience and resources to broaden our range of financial options for customers while also diversifying the Group’s revenue streams.”

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AIB confirmed in early March that it had agreed to acquire Goodbody Stockbrokers for €138 million, including the stockbroking and wealth management group’s €56 million of surplus cash, in a deal that would protect bonuses for staff of the securities firm.

The deal will also mean 30 AIB corporate finance and wealth management staff transfer to Goodbody Stockbrokers by the end of next year and benefit from the brokerage’s variable pay policy.

AIB, which previously owned Goodbody for 21 years, was forced to sell the firm a decade ago for €24 million as the bank went through a European Union restructuring plan tied to its taxpayer bailout. That deal involved Fexco taking a controlling stake in the business, with management and certain employees, led by Mr Barrett, ultimately left with a 49 per cent interest.

While the value of the current transaction is a multiple of the size of the 2011 deal, sources previously noted that AIB had extracted about €100 million of surplus cash from Goodbody before the sale a decade ago.

AIB said early last week that the Central Bank had approved the purchase. The Competition and Consumer Protection Commission gave it the green light in late June.

Goodbody manages assets of about €8 billion and employs 300 people in offices across Ireland and the UK, provides wealth management, asset management and investment banking services.

Davy analyst Diarmaid Sheridan said that 2021 has been a “a busy year” for Colin Hunt in deal making.

AIB signed up in June to acquire €4.2 billion of Ulster Bank’s corporate and commercial loans the Republic, as the UK-owned lender exits the market in the Republic. It also agreed in June to form a life and pensions joint venture with Canada Life Irish Holdings Company as it seeks to boost its income and product offering in an era when ultra-low interest rates are weighing on lending margins.

AIB expects revenue associated with the deals to come to about €230m by 2023, chief financial officer Donal Galvin told analysts early last month as the group reported interim results.