Statement by Minister Donohoe following Bank of Ireland’s announcement that it has reached agreement to acquire Davy

Transaction will be good for the Irish economy and Bank of Ireland as well as bringing certainty to Davy's future

Following the announcement by Bank of Ireland earlier today (22nd July) that it had reached agreement to acquire most of the business of leading financial services provider Davy, the Minister for Finance, Paschal Donohoe TD, commented that this brings to an end the uncertainty created by the Davy sales process and is therefore a welcome outcome for the Irish economy due to Davy's importance as an indigenous wealth manager and capital markets firm.

As the Minister said at the time of AIB's acquisition of Goodbody, there are economic benefits for the country which arise 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. This rationale applies equally to Bank of Ireland's acquisition of Davy.

Speaking following this morning's announcement, Minister Donohoe said:

'Today's announcement by Bank of Ireland brings to an end an uncertain period for Davy and provides it with a well-capitalised owner providing opportunities for growth, which will support the wider needs of the Irish economy and businesses.

'This transaction provides Bank of Ireland with growth opportunities as it expands its product range in the high net worth and mass affluent categories. Furthermore, it supports the bank's stated strategic priority of growing the wealth and insurance business with the aim of unlocking growth opportunities in Ireland, increasing fee income, and generating sustainable profits.

'The standard remuneration arrangements in a stockbroking and wealth management business are very different to those that pertain in a retail and commercial bank such as Bank of Ireland. Reflecting this, the bank sought my consent for the continuation of the current remuneration arrangements in Davy which I duly granted. This has been done in a manner consistent with the AIB acquisition of Goodbody and ensures ongoing compliance with Government policy on bank remuneration which remains unchanged.'

ENDS

Notes to the editor

• There have been no changes to the Government's policy in relation to bank remuneration.
• Bank of Ireland will continue to adhere to the Government's pay restrictions, with separate ring-fenced remuneration structures in place for Davy.
• Completion of the acquisition is conditional on satisfactory completion of customary conditions including approval by the Central Bank of Ireland and the Competition Authority.
• While the Group will optimise synergies to expand customer offerings for both existing Bank of Ireland and Davy private and corporate clients, Davy will remain as a separately regulated subsidiary of the Bank of Ireland Group with its own brand and board.

Staff transfer:

In order to fully realise the significant potential synergies between the Bank of Ireland and Davy businesses, a limited number of employees may transfer from Bank of Ireland to Davy, with variable remuneration applying, as follows:

• No movement of staff until regulatory approval is granted;
• Thereafter movement will be allowed for the following numbers -
• Up to 80 people by end-2022
• Up to 12 people per annum after that
• No former BOI employee earning in excess of €50,000 per annum will be hired into Davy within two years of departing the bank.