AIB Poland boss Mr Gerry Byrne has not ruled out the possibility that the group's polish business, Bank Zachodni WBK (BZWBK), could acquire or merge with other lenders in the eastern European country in the future.

However, he firmly dismissed all recent reports that the bank was nearing the completion of a deal with a one of a number of targets, including Bank Millennium, owned by Portugal's BCP.

Mr Byrne told The Irish Times yesterday that there were 75 licensed banks currently operating in Poland, with around 10 of them, including BZWBK, sharing 90 per cent of the market.

This indicated that it would begin to consolidate in the short to medium term.

"If you look at the Polish market relative to more mature European markets, where you have five to 10 players, the arithmetic would be that the numbers will reduce somewhat," he said.

He said AIB was open to acquisition opportunities, but said it was focused on building its existing business, which he said had put in an impressive performance despite a "disappointing" top line. BZWBK slipped into a €3.7 million loss during the last quarter of 2003, compared to a €12 million profit a year ago.

Earlier, Mr Byrne told news agency Reuters in an interview that any acquisition or merger deal made by AIB would have to involve a controlling interest for the Irish bank. He added that other parties would have to consider how this would suit their philosophy.