AIB sells pensions division to Hibernian

THE white flag finally went up at AIB’s life and pensions subsidiary yesterday as the bank offloaded its struggling Ark Life business to Hibernian, one of the unit’s biggest rivals.

Hibernian Life & Pensions, the number three in the Irish market, will merge with Ark Life, which holds the number four position. AIB will receive €195 million in cash and a 24.99% stake in the merged business, with a further €10m to come if certain targets are met. It will record a once-off gain of €145m in the current year.

Hibernian, a subsidiary of Britain’s Aviva, will hold the remaining 75.01% of the enlarged business. It said the deal would create a new distribution channel that would fit well with its existing broker network.

AIB will continue to sell life and pensions products carrying the Ark Life brand through its branches. The bank said the new arrangement would give the combined business extra scale and leave it well-positioned to benefit from the uplift in the Irish life, pensions and investments market.

Managing director of AIB’s Irish division, Donal Forde, said the deal “marks the formation of a new leading player” in the market. “In combining the proven distribution capability of AIB with the international bank assurance experience of Aviva, we believe that we have devised an innovative formula that will provide a comprehensive range of quality products to our customers,” he said.

The world’s sixth-largest insurance group, Aviva has considerable experience of signing partnership deals with banks, including an arrangement with banks in Britain, Spain, Italy, France and the Netherlands.

Hibernian chief executive Bryan Jenkins said the deal would give customers greater choice and access to a wider range of funds and fund managers.

“Joining forces with Ireland’s biggest retail bank confirms our position as a leading life company in Ireland,” he said.

“This partnership will bring us broader distribution capability, building on the already strong relationship we have with our broker partners.”

AIB had been reviewing its life and pensions options for a number of years. Ark Life had failed to impress over a significant period and had been on the market for some time.

Bank workers’ union the IBOA said it would seek “firm assurances” from AIB management on the impact of the deal on staff.

The union’s general secretary, Larry Broderick, said: “IBOA will be seeking absolute guarantees that staff terms, conditions and benefits are fully protected prior to the sale and that members’ jobs are secured into the future.”

More in this section

Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Our Covid-free newsletter brings together some of the best bits from, as chosen by our editor, direct to your inbox every Monday.

Sign up