BoI finalising sale of unit to US giant
Published 22/10/2010 | 05:00
BANK of Ireland (BoI) was last night putting the final touches on the €60m sale of its asset management division in the hopes of announcing the long-awaited deal today.
The bank has agreed to sell BoI Asset Management (BIAM) to US financial giant State Street, which already employs 2,000 in its Irish financial services centre.
Sources last night said the exact price had not yet been agreed, but was likely to be within a "couple of million" of €60m.
BIAM has effectively been on the market since mid-April, when Brussels told BoI it would have to sell off non-core assets as a condition of its state bailout.
Irish Life was initially mooted as a likely suitor, but the pursuit was quickly dampened by comments from BIAM chief Chris Johns who said the bid could raise "competition issues".
State Street was first mooted as a buyer in late August, when Bloomberg reported the US company was in talks to buy the Irish asset manager.
The move is seen as especially significant for State Street since the company's roots are in 'passive' funds linked to indexes, whereas the bulk of the €25bn under management at BIAM is actively managed.
For BoI, the BIAM deal marks the first completed sell-off in a disposals process that will also see it off-load life insurance arm New Ireland and ICS Building Society.
The bank has until 2014 to complete the sales and, unlike AIB, it is not relying on the sales to beef up its capital base since substantial funds have already been raised on the markets.
BIAM and New Ireland were billed as the priority sales, since customers in those businesses were judged likely to be put off by prolonged periods of uncertainty.