Bank of Ireland’s takeover of Davy has been given the go ahead by Competition and Consumer Protection Commission (CCPC).
The deal values the country’s biggest stock broker at €440m and comes after the takeover of Goodbody Stockbroker by AIB.
The formal approval has been granted for Bank of Ireland to buy Amber Note Unlimited Company, the wealth management and capital markets divisions of Davy, with six locations in the Ireland and offices in the UK and Luxembourg. The deal also requires sign off from the Central Bank, as regulator of both.
The takeover of Davy is happening at a time of unprecedented concentration in the sector. Bank of Ireland is also in the process of buying the mortgage business of KBC Bank Ireland while AIB is buying Ulster Bank’s commercial lending business as well as Goodbody and Permanent TSB is buying Ulster Bank’s retail lending.
The details of the Davy deal will see staff at the stock broker escape pay caps and bonuses bans that apply at bailed-out banks including Bank of Ireland, with up to 80 staff at what will be the parent bank also able to transfer to Davy after the deal concludes.
That’s expected to be early next year and will initially see the bank pay 75pc of the sale price on completion.
The remainder is due to be paid in 2024, conditional on the performance of the business and “the management of risks or legal issues which might arise”, according to a Bank of Ireland spokesperson.
An additional €40m has been set aside by Bank of Ireland for the retention of key staff in the firm who hit “stretch performance” targets by 2025 and is not being distributed generally to all shareholders.