AIB HAS REACHED an agreement to buy stockbrokers Goodbody in a deal worth €138 million, subject to approval by the Central Bank of Ireland and the Competition and Consumer Protection Commission.

The €138 million figure reflects an €82m enterprise value and roughly €56m excess cash on Goodbody’s balance sheet, the bank said.

The deal will see “a small number” of staff from the bank’s Corporate Institutional and Business Banking team “move across to Goodbody over time to avoid duplication”, according to a statement from AIB this afternoon.

Goodbody, which is 51% owned by Kerry-based financial services firm Fexco, manages assets of about €8 billion and employs 300 people in offices across Ireland and the UK. 

The remaining 49% of the company is owned by chief executive Roy Barrett and other staff members.

Fexco originally acquired its stake in stockbrokers from AIB for a reported €24 million in 2010.

Goodbody was also the subject of a takeover bid by the Bank of China last year, which ultimately fell apart after the bank walked away citing the uncertainty caused by the pandemic.

‘Income streams’

“The acquisition is consistent with AIB’s strategy announced in December 2020 to make selective investments in order to address gaps in its overall customer offering and diversify income streams,” the bank said in a statement.

Describing the acquisition as a “landmark deal”, AIB chief executive Colin Hunt said the bank is positioning itself for expansion in Ireland and stands “ready to underpin Ireland’s economic recovery as we emerge from the COVID-19 pandemic.”

“The acquisition of Goodbody will greatly increase the group’s capacity to broaden its services to customers, while also enhancing the bank’s growth opportunities,” he said.

Hunt said that the group will “optimise synergies” between the two entities but that Goodbody “will remain as a separately regulated entity with its own brand and board.”

Minister for Finance Paschal Donohoe has described the deal as good news for the Irish economy.

“Today’s announcement by AIB a will have positive impact for the State as a whole but primarily it will ensure that Goodbody continues to have a well-capitalised owner providing opportunities for growth, which will support the wider needs of the Irish economy and businesses,” the Dublin Central TD said.

“This acquisition also represents an excellent strategic opportunity for AIB to deliver on its ambition to diversify its revenue in a low-interest-rate environment. 

“For Fexco, which is an important employer in the south-west, the proceeds it receives from the transaction will help it continue to grow and innovate in the financial services sector.”