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Irish Times
4 days ago
- Business
- Irish Times
AIB to sell its 49.9% stake in merchant services joint venture
AIB has agreed to sell its 49.9 per cent stake in AIB Merchant Services, which helps businesses accept card payments from customers, to its joint venture partner, the US financial technology group Fiserv. The Irish bank booked €34 million of income from its minority stake in 2024. The transaction will have the effect of boosting AIB's capital reserves – measured as common equity Tier 1 – by 0.35 of a percentage point, it said in a statement. This equates to about €215 million. Goodbody Stockbrokers analyst Denis McGoldrick estimates that two-thirds of the capital boost will come from a gain from the sale, with the remainder resulting from a release of regulatory capital reserves held against the asset. Founded in 2007, as a joint venture between AIB and Fiserv, AIB Merchant Services (AIBMS) is one of Ireland's largest payment solution providers and one of Europe's largest ecommerce acquirers, providing businesses with the ability to accept card payments from their customers. READ MORE There will be no day-to-day change for AIBMS customers as a result of this announcement and no customer action is required, AIB said in its statement. AIB will continue to work with AIBMS and Fiserv by referring AIB customers who require these services to the company. AIBMS will continue to operate as AIBMS, under a short-term brand agreement, allowing for an orderly exit of the AIB brand from the business. 'Following a successful joint venture partnership, we believe Fiserv has the commitment, experience and innovative technical solutions to grow AIBMS and that our customers will continue to be well-served under their sole ownership,' AIB chief executive Colin Hunt said. The transaction is expected to be completed later this year subject to relevant regulatory approvals. 'This transaction makes sense for AIB from both a strategic and financial point of view,' said Mr McGoldrick. 'AIB's focus is on delivering enhanced customer outcomes, financing the green transition and operational efficiency and resilience, so a merchant servicing business no longer fits well within those ambitions.'
Irish Independent
15-05-2025
- Business
- Irish Independent
Two new digital banks unlikely to impact Irish market as inertia holds sway, analysts say
Household deposits in Ireland earn an average of 0.13pc a year in interest, but online accounts offer as much as 2.5pc Moves by two international banks to set up retail operations in Ireland may have a limited impact on the market, due to what was described as 'customer inertia'. Wall Street giant Goldman Sachs is reported to be in talks with the Central Bank of Ireland about setting up its digital bank, Marcus, in this country. And Ireland got its first new bank in more than two decades last month, when Avant Money revealed it is now a fully licensed bank in this market. It is keeping its Avant Money name for now, but is expected to change to the Bankinter brand in time. It is owned by Spain's Bankinter. Avant Money already offers mortgages, credit cards and personal loans in this country, but will now add deposits to its offering. It is expected to launch deposit products for savers later in the year. Irish households held €162bn in deposit accounts as of March 2025 Goldman Sachs Group's move to set up its retail bank Marcus here could shake up the country's heavily concentrated market, but savers are reluctant to move money to digital banks. Irish households held €162bn in deposit accounts as of March 2025. About 86pc of this was held in current or overnight accounts – down from a peak of 94pc in late 2022. Household deposits in Ireland earn an average of just 0.13pc in interest, compared with 0.32pc in the euro area, according to Central Bank of Ireland data. The low offerings have prompted scrutiny from politicians about banks' failure to pass on rate increases. ADVERTISEMENT In the UK, Goldman Sachs' Marcus offers an interest rate of 4.3pc to British depositors. In this country, international banks Revolut, N26 and Bunq and platforms such as Raisin and Trade Republic have been active offering deposits to Irish households for some time. But banking analysts said the presence of more digital banks here is unlikely to shake up the savings market. Analyst Denis McGoldrick of Goodbody said inertia and an unwillingness to trust digital-only platforms meant the bulk of the €162bn in households savings were held in AIB, Bank of Ireland and PTSB. Irish households retain significantly larger balances in current accounts In a note to investors, Mr McGoldrick wrote: 'Goldman Sachs are the latest retail bank to eye the Irish deposit market, with Bankinter's Avant Money set to launch their own offering in the coming months. 'While the deposit market is perceived to lack competition, the reality is that there are a host of options available for consumers beyond the three listed banks, particularly through the online platform Raisin which gives access to a wide range of European institutions.' He wrote that a 'combination of customer inertia and unwillingness to trust digital-only platforms has resulted in only around 2pc of household deposit being held outside the three pillar banks.' Analysts at Davy Stockbrokers Diarmaid Sheridan and Thomas Ryan said the banking market has been consolidated, but competition has had 'with limited impact to date'. 'Compared to euro-area averages, Irish households prefer to retain significantly larger balances in current and overnight accounts, with only small amounts of deposits held outside the three domestic banks,' they said. 'Goldman Sachs' digital bank, Marcus, may be well resourced, but it will likely be some time before any prospective plans come to fruition; other banks will launch in advance, with Bankinter's Avant Money set to launch savings products later this year.' Revolut launched savings products for savers here last year, but has only attracted around €1bn in deposits.
