AIB expects to realise a profit of €93 million (£73 million) from the sale of its interest in Singapore-based bank Keppel Capital. AIB said yesterday it had agreed to sell its 0.94 per cent holding in Keppel Capital to Oversea-Chinese Banking Corporation Limited (OCBC), Singapore's second-largest local bank.

The OCBC deal entails an offer per share of 3.65 Singapore dollars. AIB paid £661 million (€839) - or 3.34 Singapore dollars per share - for its interest in Keppel Capital just over two years ago. The Irish bank also holds an option to buy a further 24.9 per cent of the bank in 2002. Under the sale deal, AIB will relinquish that option in favour of 1.28 Singapore dollars for each listed warrant. It is from these warrants that the "lion's share" of the projected €93 million profit will come, an AIB spokesman said yesterday. He estimated that the bank's equity interest in Keppel would amount to just €6 million.

This deal comes after OCBC's second bid for Keppel Capital, one of Singapore's smallest banks. An initial bid of 3.38 Singapore dollars per share and 1.01 Singapore dollars per warrant was made last month.

The sale of Keppel Capital, while bringing significant profits for AIB, also signals the bank's exit from the Asian market. Before acquiring its interest in Keppel Capital, AIB had operated a private banking and treasury arm in Singapore for several years. This operation was sold to Keppel in 1999.

Analysts yesterday welcomed the news of AIB's withdrawal from Singapore, saying that the bank would now be in a better position to concentrate on its more significant international interests in Poland and the US. As of yesterday, fewer than 10 AIB staff were working in Singapore for Keppel Capital. The acting chief executive officer of Keppel is Mr Walter Coakley, an AIB executive.

The OCBC offer will be formally dispatched to Keppel shareholders and listed warrantholders by this Thursday. The offer's closing date will be August 3rd.

AIB's share price closed at €13.10 yesterday.