That is the view of Eamonn Hughes of Goodbody Stockbrokers, an AIB subsidiary.
Goodbody’s is also brokers to the bank. The weekend reports, not denied by AIB, that it was examining the sale of Ark Life has implications for future strategy in the Irish market, according to Mr Hughes.
If proved correct “this preference for third-party distribution in the life assurance arena should ensure any lingering expectations of an AIB bid for IL&P bite the dust,” he said.
It has also been reported IL&P is also in the process of selling its British subsidiary.
Life insurer Chesnara said yesterday it was talking to Irish Life about acquiring its closed life arm, City of Westminster Assurance Company.
“Chesnara confirms that it is in discussions with Irish Life & Permanent regarding this particular potential transaction, but no agreement has been reached,” the group said.
In the case of Ark Life if a deal is done with Hibernian which is owned by Aviva, Ark will remain a tied agent of AIB, while ownership would pass to Aviva.
The 2004 results show the contribution of Ark Life was equal to 2% of group income. While the financial implications of the deal are limited, Mr Hughes says such a move would speak volumes about strategy at the country’s largest bank.
On the Ark Life basis, AIB and Bank of Ireland are moving in opposite directions where Bank of Ireland has expanded its life involvement through the strategic purchase of New Ireland and the development of its own life arm.
In a note to clients yesterday Mr Hughes put a buy recommendation on AIB at €13.45 while he advises a reduction in investor exposure to IL&P. Stuart Draper of Dolmen Butler Briscoe believes most of the financials have had a full upgrade in the past 12 months and is not a fan of AIB at this stage, he said in a recent interview.