AIB chief executive Mr Michael Buckley has told staff the group will not be merging with Bank of Ireland. Irish Bank Officials Association (IBOA) general secretary Mr Larry Broderick said yesterday Mr Buckley had told the trade union the bank was committed to developing its business and remaining an independent bank.

"Mr Buckley has effectively ruled out the prospect of a merger between the bank and Bank of Ireland. His reassurances in relation to the bank's wish to grow its business as an independent entity go a significant way towards addressing our members' concerns," he said.

The IBOA has opposed the merger proposal promoted by Bank of Ireland group chief executive Mr Michael Soden. It suggests a link-up between Ireland's two biggest banks would lead to the closure of 100 branches and the loss of 5,000 jobs.

"If the merger did go ahead, there would be huge implications for the employees of AIB and Bank of Ireland, as well as other financial institutions, customers and the Irish economy," Mr Broderick said.

Senior banking executives had questioned whether a merger between the two banks would be allowed under the competition regulations in Ireland and in Europe.

The meeting between the IBOA and Mr Buckley was arranged following the €777 million fraud at AIB's US subsidiary Allfirst. The bank has since appointed a special adviser to validate all of AIB's control mechanisms.

The IBOA also raised issues such as bullying and aggressive behaviour highlighted in the Ludwig report that helped to conceal the fraud at Allfirst for five years. Mr Buckley said he would work with the IBOA to ensure proper procedures are adhered to throughout the AIB group. He also gave a commitment to continue to work with the union on a partnership basis.

The IBOA received commitments that the Allfirst fraud would not have any immediate impact on temporary staff jobs. AIB will also continue its capital expenditure programme to grow the bank's business, Mr Buckley said.