Allied Irish Banks' decision to replace Warburg Dillon Read as its London broker with Merrill Lynch has nothing to do with the slump in the AIB share price over the past year, a spokesman for the bank has stated. AIB shares fell another 13 cents yesterday to a new 12-month low of €8.47 and have more than halved in value in the past 12 months.

AIB announced yesterday that Merrill Lynch has replaced Warburg as its London broker, but investor relations manager Mr Conor Herlihy said that the decision was simply the result of a periodic review. Warburg has been AIB's broker in London for the past 10 years.

"We periodically carry out these sort of reviews and we talked to a number of companies," said Mr Herlihy. "Merrill Lynch was chosen because it had the best plan, it's big in research with a well-regarded banking analyst in Richard Coleman and has good connections in both the UK and the US."

Mr Herlihy said that there were no plans to carry out a similar review of AIB's stockbroking arrangements in Dublin, where the bank's broker is its own Goodbody Stockbrokers subsidiary.

But the timing of the Merrill Lynch appointment, the slump in the share price and the current antipathy towards Irish banking stocks among both domestic and overseas investors will inevitably lead to speculation that AIB was dissatisfied with its relationship with Warburg.

The Irish banks, AIB included, are currently trading on a substantial discount to the average bank rating in the euro zone, and market sources believe that AIB has enlisted Merrill Lynch in an effort to boost its profile.