The consideration may be subject to certain adjustments and is payable in cash on completion. The sale will be effected through a business transfer scheme under the Financial Services and Markets Act 2000 and is subject to approval by the UK Courts and the Financial Services Authority. Completion is expected to occur in the autumn.
Bank of Ireland will retain the Bristol & West brand and all other parts of the Bristol & West business.
Brian Goggin, Group Chief Executive, Bank of Ireland, said: "This is an excellent result for Bank of Ireland and for the customers and employees of the Bristol & West branch network. The disposal delivers on a key commitment set out by us last November. To sell at a good price to a quality institution, while enhancing the offering to customers and maintaining employment, is good news for everyone."
"Our business in the UK is now focused on three key areas: the successful Bristol & West and Bank of Ireland mortgage business; our growing business banking operation; and our venture with the UK Post Office which allows us to distribute financial services products to a wide UK consumer market through Europe's largest retail network."
The profit on disposal of the branch network is expected to amount to approximately £90 million (c. EUR131 million) after tax and will be reflected in the results for the year ending 31 March 2006. The transaction is expected to be earnings neutral from a Bank of Ireland Group perspective going forward and have a positive impact on the Group and UKFS cost/income ratios. The branch network made a profit before tax of £(0.4) million (c. EUR(0.6) million) in the year ended 31 March 2005, comprising operating contribution of £16 million (EUR23.3 million) less costs of support services of £16.4 million (c. EUR23.9 million). Net assets were negligible at 31 March 2005.
