First Active has sold its shareholding in British mortgage lender Britannic Money for £69.5 million sterling (€108.7 million) in cash.
The 40 per cent ordinary shareholding was sold for £56.5 million, and the preference shares - all of which were held by First Active - were sold for £13 million.
First Active finance director Mr Michael Torpey said the bank wants to focus on the Irish mortgage and savings market and is "satisfied to dispose of [its] remaining stake in Britannic Money at this stage in development".
Britannic Assurance said the £56.5 million for the ordinary shares was fully provided for in its 2001 accounts.
First Active said the terms of the deal are determined by an option agreement between the two companies at the time Britannic Assurance acquired a 60 per cent interest in Britannic Money in September 2000.
First Active will also retain the right to future preference share dividends for 2003 and 2004.
The market welcomed the news, saying the transaction is good for First Active as it reduces its exposure to the British mortgage market and Britannic.
The disposal will not impact on earnings over the next two years and will have a modest positive impact on the company's capital base.