Statement by Minister Donohoe following AIB’s announcement that it has reached agreement to acquire Goodbody

From Department of Finance 

Transaction will be good for, and will strengthen, AIB, Goodbody, Fexco and the Irish economy

Speaking this afternoon (Tuesday) following

the announcement by AIB Group plc (AIB) that it had reached agreement to acquire leading financial services provider Goodbody Stockbrokers UC (Goodbody), the Minister for Finance, Paschal Donohoe TD, said today’s announcement by AIB is a positive outcome for the Irish economy as well as the three Irish businesses involved: AIB, Goodbody and Fexco*.

The Minister went onto say that the economic benefits for the country will stem from the importance of having a competitive and vibrant stockbroking sector in Ireland to help ensure that indigenous Irish SMEs and corporates can access the capital markets. This will enable them to fund their future growth plans which will underpin Ireland’s economic recovery as we emerge from the Covid-19 pandemic.

Speaking following the announcement, Minister Donohoe said:

‘Today’s announcement by AIB will have a 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’.

“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. The addition of Goodbody offers growth opportunities for the AIB Group in broadening its financial offerings in the life, pension, wealth and asset management sectors, in addition to enabling its Irish corporate and business customers to access a greater range of services.

“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.

“Under the terms of the acquisition, a small number of AIB staff, including from its Corporate Finance and Wealth Management business will transfer to Goodbody in order to maximise synergies between the teams and avoid duplication of activities. There will also be a restriction on Goodbody hiring any person in the open market or otherwise, with a total remuneration package above €50,000, who was an employee of AIB (or any Group Company) at any time within the previous two years. ”

“The standard remuneration arrangements in a stockbroking business are very different to those that pertain in a retail and commercial bank such as AIB, and reflecting this the bank has sought my consent for the continuation of the current remuneration arrangements in Goodbody. This has been done in a manner which ring-fences Goodbody from the rest of the AIB Group and ensures ongoing compliance with Government policy on bank remuneration which remains unchanged.

“I also welcome today’s announcement by AIB that it intends to establish a SME Equity Fund, which will be of assistance to companies wishing to access equity finance, which will focus on backing businesses that can help accelerate Ireland’s transition towards a low-carbon economy.”