Saturday 16 February 2019

AIB in new bid for Investec wealth management arm

Lisa Curtin, internal audit, Investec, who plays tag rugby for Ireland and club GAA, with hockey player Lauren Walsh, at this week’s launch of Investec’s media awards, to reward excellence in journalism focused on women in sport. Photo: ©INPHO/Morgan Treacy
Lisa Curtin, internal audit, Investec, who plays tag rugby for Ireland and club GAA, with hockey player Lauren Walsh, at this week’s launch of Investec’s media awards, to reward excellence in journalism focused on women in sport. Photo: ©INPHO/Morgan Treacy
Gavin McLoughlin

Gavin McLoughlin

AIB is in talks to buy Investec's Dublin-based wealth management arm, the Irish Independent has learned. A number of other parties are also understood to have expressed an interest in buying the wealth management business.

Last year, an attempt by AIB to buy all of Investec's operation here fell apart, but the two sides are now back in talks, this time focused on a more limited deal for part of the Investec business, it is understood.

Wealth management can be an attractive area for banks because it diversifies revenue streams, providing fee-based income to sit alongside the interest payments banks receive on loans. AIB and Investec both declined to comment.

The Investec wealth management unit employs just under 40 people directly, though it also makes use of services shared with the rest of the operation.

As of last June, Investec's Irish arm had €2.5bn in assets under management.

The wealth management and stockbroking world has been subject to significant consolidation in recent times.

Increased regulatory costs have meant scale is becoming more important.

At home, Bank of Ireland boosted its offering in this area two years ago when it bought Covestone Asset Management, and Cantor Fitzgerald Ireland last year bought Merrion Capital.

AIB, 71pc-owned by the State, is now back for a second round of negotiations with Investec, while Goodbody was almost sold to a Chinese buyer until the deal collapsed last month.

Completing a deal will require AIB to fend off competition from what the Irish Independent understands to be a number of interested parties.

The bank is also reportedly in talks to buy Payzone, a payments processor that would further diversify AIB's revenue stream. Payzone provides services for transactions like electronic toll payments, or for topping up the 'Leap Cards' that can be used for cashless payments on some public transport services here.

With AIB CEO Bernard Byrne departing for Davy, his successor Colin Hunt - an experienced banker and one-time economic adviser to Brian Cowen - will be charged with driving the performance of any acquisitions.

Irish Independent

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