BoI 'not vulnerable to takeover'

HOURS after Bank of Ireland said it was not vulnerable to a takeover, Barclays bank's Kerry-born chief executive Matthew Barrett said his bank is open to partnerships or mergers to keep pace with US competitors.

The governor of Bank of Ireland's court of directors, Laurence Crowley, told reporters at a banking conference in London that the bank is not vulnerable to takeovers.

"We don't feel under threat. We feel we have to meet the competition head on," said Mr Crowley. In fact, he said, the group's strategy would provide for bolt-on acquisitions.

Hours later in unrelated comments at the same conference, Barclay's Mr Barrett said: "Barclays has always been open to considering partnerships with other banks on the continent or across the world."

Mr Barrett told journalists outside the International Monetary Conference in London: "reaccelerating consolidation in the US is lending more impetus to dialogue among banks," he said.

While Bank of Ireland has recently overtaken rival Allied Irish Banks as Ireland's biggest bank by market value, AIB retains a 22.5% stake in New York-based M&T bank, one of the top 20 US banks.

Last week, Bank of Ireland appointed its head of asset management, Brian Goggin, to the position of chief executive following the resignation of Michael Soden on May 29 for breaching company guidelines on internet usage. Mr Soden, who did not endear himself to the market during his two-year tenure, stepped down after admitting accessing adult websites on his office computer during company time.

There is no doubt the sudden vacancy at the top sparked speculation the bank could attract the attention of predators.

Yesterday, Mr Crowley said Mr Goggin, 52, a career banker who has been with the group since 1969, would be looking at the bank's future direction.

"We need to give him time to settle in ... he will obviously be reviewing the strategy," said Crowley. Mr Crowley said the outlook for the bank was good, with strong economies in its key Irish and British markets.

"House prices are high in both Britain and Ireland, but I don't foresee a crash," he said, referring to fears about potential property bubbles.

Mr Crowley said the bank did not consider that consumer debt was too high in either economy relative to income.

On interest rates, he said the bank's view was for a move higher.

"We would factor in the potential for a considerable hike in interest rates," he said, adding an increase in rates would help the bank's margins, which have been under pressure in Ireland.

Additional reporting Reuters.

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