BANK of Ireland is set to make a major move into the British market through the acquisition of a big building society, Bristol & West. Bank of Ireland is expected to pay more than £600 million - the third-biggest acquisition ever by an Irish company - and an announcement is expected next week.
Bank of Ireland already operates in Britain, but the acquisition of Bristol & West, the ninth-biggest building society in Britain, would transform its operations there.
The British society has a mortgage book of £7 billion, more than twice the size of Bank of Ireland's existing British loans of £3 billion.
The acquisition is also a significant one for the Bank of Ireland
Bristol & West has total of £8.5 billion, and the action will boost the bank's total current assets forecast of fund £19 billion this year by than 40 per cent.
Bank of Ireland and Bristol & West yesterday declined official comment on the move.
However, a spokesman for the building society said a takeover would be welcome if it allowed the society to continue as a Bristol-based financial services organisation, specialising in mortgages, savings and investments.
On Thursday the British society stopped taking new accounts, as it was facing a flood of applications from people hoping to cash in after a takeover.
The society will have to abandon its mutual status and, as happened with the Irish Permanent, this will involve a cash pay-out to its members.
Stock market analysts in Dublin and London expect that Bank of Ireland will have to pay just over £600 million for the building society.
A fair proportion of this cash will come from Bank of Ireland's balance sheet, but the bank will also have to raise extra money.
Market sources in Dublin believe the bank is likely to borrow the money rather than ask shareholders to subscribe for new shares. Yesterday Bank of Ireland shares rose 2p to 426p.
Bank of Ireland will hope that the acquisition will give it the scale to make a decent return from the British market.