Mr Farrell is current head of private banking at Ulster Bank.
AIB’s private bank has seen a sharp fall in business over the past few years. It had been focused on offering property-related investments in the years leading up to the collapse of the economy in 2008.
Sources say AIB wants to develop its wealth management business as part of a strategy to offer a new range of services to its customers.
It is believed that the bank had been approached by a number of third parties about outsourcing its wealth management services. However, it took the decision to keep the function internally.
The division has five employees in the Dublin office and four in the Cork office. It is expected that a number of other appointments will be made over the coming months.
There has been a lot of consolidation in the Irish wealth management sector over the past few years, with a number of firms exiting the market. Last July, HSBC decided to close its wealth management division following an internal review.
Investors kept a significant amount of their funds on deposit over recent years as the eurozone debt crisis escalated. But because of the low prevailing interest rate and a recent pick-up in equity markets, there has been a surge in demand for investment services.
Mr Farrell is currently on gardening leave from Ulster Bank and is expected to take up his new position in May.
A spokesperson for Ulster Bank said that Mr Farrell’s departure does not signal any change in strategy for its private bank. His replacement is expected to be announced over the next few weeks. Mr Farrell could not be reached for comment.
AIB and Ulster Bank are both in recovery mode.
State-owned AIB will release its full year results for 2012 next Wednesday.
The bank is expected to show a significant loss as the mortgage arrears crisis continues to weigh on its overall performance.