Bank of Scotland move could force rivals to act

THE aggressive move by Bank of Scotland, Ireland (BOSI) for dominance of the Irish business banking market is expected to force the AIB and Bank of Ireland to pay more interest on current accounts, according to some Irish brokers.

However, none of the major stockbroking houses, two of which are owned by AIB and BoI, believe BOSI’s plan to pay near ECB rates of interest on current accounts and cut overdraft rates by a fifth, will have any serious impact on bank earnings this year.

Goodbody Stockbrokers, 100% owned by AIB, said the move by BOSI was expected. They said that having successfully shaken up the mortgage market with aggressive marketing back in 1999, BOSI is attempting to replicate this success “While recognising that this initiative is an obvious negative for domestic margins we would highlight several important points here.