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Scandal-beset AIB Group and Bank of Ireland (BoI), Ireland's two biggest retail banks, may draw bids from foreign competitors amid what is seen as the urgent need to restore the image of the country's troubled financial services industry.
In the latest disarray in Irish banking, AIB chief executive Michael Buckley has admitted that the bank overcharged clients on mortgages and currency trades and is investigating how it allocated shares in initial stock sales. Its foreign exchange fiasco, in which AIB is alleged to have overcharged customers on a range of transactions, is now expected to cost it up to E50 million (US$61 million). In a separate development, Bank of Ireland's chief executive Michael Soden resigned at the end of May, after admitting to viewing adult content on the internet using office computers.
At the same time, speculation surrounds the future of National Irish Bank and its Ulster-based sister Northern Bank, both owned by the troubled National Australia Bank (NAB). National Irish has been linked with a potential bid by one of the big British banks, such as Royal Bank of Scotland (RBS), although the Irish lender insists that it is not up for divestment by NAB.
Such a bid for National Irish, structured by RBS through its Northern Ireland...