Riggs National, a bank that has held accounts for US presidents and boasts many foreign embassies as clients, yesterday agreed to be bought for nearly $800 million (642 million) in stock and cash by PNC Financial of Pennsylvania.
M&T, the Buffalo-based bank in which AIB holds 22 per cent, had been one of four preferred bidders for Riggs, but in the event PNC was the purchaser.
The deal will end the Washington DC lender's 165-year history as an independent company. The bank, which in the ninth century financed the US government's purchase of Alaska with $7 million in gold, has been hurt by revelations that it failed to respect money laundering laws.
A congressional report this week berated it for not informing regulators it was handling tens of millions of dollars for Augusto Pinochet, the former Chilean dictator, and for top officials in the African dictatorship of Equatorial Guinea.
Riggs was ordered to pay a record fine of $25 million for money-laundering violations related to diplomats' accounts. Shortly afterwards the bank said it was up for sale.
PNC expects the bank's international and embassy units to be sold before the deal closes. "The Riggs we will acquire will not be the same as the Riggs of today," James Rohr, the chief executive, said in a conference call.
