AIB has agreed to buy one of Canada's largest fund-raising consultancies to strengthen its position as a service provider to the North American not-for-profit sector. The bank has not disclosed how much it will pay for the Ketchum Canada group.
Ketchum has provided fund-raising and training to universities, hospitals, cultural institutions and religious organisations. It was founded in 1984 and employs 85 staff at offices in Toronto, Montreal, Calgary and Vancouver. It will retain its name, staff and regional offices and report to AIB's US division.
AIB is keen to expand into this sector, having last year purchased Community Counselling Services (CCS), the largest fund-raising consultancy in the US. Commenting on the deal yesterday, Mr Brian Leeney, executive vice-president of AIB and chairman and chief executive of CCS, said Ketchum fitted extremely well with the bank's plans for the US market. Mr Ross McGregor, Ketchum chairman and founder, said the sale was a natural evolution for the group - which wanted to become part of an international fund-raising organisation.
The purchase is conditional on the approval of the appropriate regulatory authorities and will be completed through AIB's subsidiary Allfirst. Reports at the weekend said the bank may be close to selling its UK asset management business, Govett, for £120 million sterling (€194 million).
New Star Asset Management, the company founded by former Jupiter Asset Management chairman, Mr John Duffield, and Aberdeen Asset Management have been mentioned as likely buyers.
AIB would not comment on the speculation. Some sources have suggested, however, that a sale is not imminent. AIB bought Govett in 1995 for £101 million sterling. It currently has around £3 billion in assets under management.
Meanwhile, in a new report, Davy Stockbrokers has highlighted the large amounts of surplus capital held by AIB and Bank of Ireland, suggesting that if they do not make acquisitions, a share buy-back should be considered.
Bank of Ireland is expected to have more than €500 million in excess capital by the end of March 2003, while AIB, which currently stands at €500 million, could rise to €800 million by the end of this year. Davy says that as profit growth slows or stagnates at both banks this year, these figures could be even higher and bring further pressure to return surplus capital to shareholders.
