EBS and Allied Irish Banks will begin merger discussions this week, with the state-owned mutual pushing for its brand to be retained in the combination.
The building society is to propose that the EBS name, and at least some branches, be kept. It will argue that the EBS brand is still strong, accounting up to recently for as much as 30% of the market. The retention of a standalone brand would also open up the prospect of increasing competition if the business was sold in the future.
It was announced last week that EBS would merge with AIB after the government abruptly terminated talks over its sale to the Cardinal private equity consortium. The National Treasury Management Agency said the deal collapsed on “commercial” grounds, including concerns over future funding.
A source close to Cardinal disputed this, and said the consortium presented a full funding plan signed off by its adviser, Bank of America Merrill Lynch.
The source said there were no real talks on other elements of the deal, including a proposed loss-sharing arrangement between the new owners and the state. It is understood the consortium faces several million euros in costs.
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There is precedent for maintining the EBS brand, though a Department of Finance source indicated that cost would be a deterrent. Ulster Bank operated First Active as a standalone brand and branch network. The closure of that network was one of the first actions taken by Royal Bank of Scotland, its parent, in the downturn.
Bank of Ireland also currently owns ICS Building Society, which is branchless. ICS forms part of the bank’s disposal programme agreed with the European Union last year.