The move will see the two credit institutions merge to create a second Irish “pillar” bank, in addition to Bank of Ireland, and is seen as a key element of the Government’s restructuring plan announced on March 31.
Once the transaction is complete, EBS will operate as a wholly-owned fully licensed subsidiary of AIB, but will continue to operate under the EBS brand.
However, because it will no longer be a building society, it is expected to be called EBS Limited.
EBS chief executive Fergus Murphy said customers can continue to do business with EBS as they have always done and their deposits remain fully guaranteed under the Deposit Guarantee Scheme and the Eligible Liabilities Guarantee Scheme.
Welcoming the merger, Finance Minister Michael Noonan said completion of the deal is anticipated for July 1 subject to regulatory approvals. The minister said it would be “an important milestone in the creation of a reshaped and revitalised banking sector”, and would be “more domestically focused”. He said restructuring of the banks would continue through renewal plans for the bank boards and management teams, the conclusion of capital-raising exercises and the changed state oversight of the banking system.
The merger will swell AIB’s total assets to €165 billion from €145bn and increase its core Tier 1 capital ratio to 4.4% from 4%.
AIB has agreed, subject to certain conditions, to acquire the entire issued share capital of EBS Limited from the minister immediately upon conversion.
EBS customers will be notified in writing about the move. Customers who have enquiries can contact EBS on 1850 654 321.