Alliance & Leicester, the mortgage bank, bounced back yesterday from the failure of its planned merger with Bank of Ireland to report a 7 per cent rise in pre-tax profits to £247 million sterling (€371 million) in the six months to June 30th. Mr Peter White, chief executive, said he planned to buy back £300 million of the bank's shares this year, but remained open to acquisitions or mergers, "as long as there is a clear and achievable business case".

Mr White blamed the failure of the merger talks on their premature disclosure by the Financial Times, and on subsequent efforts by Bank of Ireland to change the structure of the deal. "The terms were moving so it was going to be a takeover by stealth. If we were going to do that we would want a premium of 40 per cent for our shareholders." But the episode showed A&L was willing to enter a deal if it offered good value to shareholders, he said.