Bank of Ireland's failed attempt to merge with the Alliance & Leicester (A&L) has been a painful experience for everyone involved. Group chief executive, Mr Maurice Keane, concedes that the bank has learned lessons from the affair but still insists that it could have been a good deal. And he insists that the bank remains well placed for progress.

Bank of Ireland is still in the market for another big deal in Britain - but it won't be hurried.

"We are wiser now than we were before the A&L talks but that doesn't mean we are rushing down the street to the next open door. We don't rush into large moves and we don't rush into reactive mode when a large move doesn't come off."

Talking to Mr Keane, it is clear that the collapse of the A&L deal still rankles. For now, he suggests the bank's senior management and board may take a little time out to reflect on the A&L experience. There are lessons to be learned if its next bold move is to succeed, he says.

"If there is an opportunity to generate significant stockholder benefit from a corporate transaction we would certainly look at that in a wiser way as a result of recent experiences."

The proposal to merge with the former British building society to create a £13 billion (€16.5 billion) entity was an ambitious undertaking by any standards. Mr Keane describes it as adventurous and remains convinced it had the potential to be a good deal for Bank of Ireland shareholders .

"We think its right to be adventurous. It's hard to be enterprising without looking at enterprising projects from time to time. The A&L deal was cross border which was always going to be more difficult, the structure was not unique but it was the first time the regulators had to confront it. Maybe one would tie up a lot of the fundamental things much earlier the next time."

Fundamental considerations such as who would get the top job and where the head office was to be located contributed to the sudden collapse of the negotiations last month. Under the terms of the merger, which were leaked to the market, it emerged that Bank of Ireland was prepared to cede the top position to A&L chief executive, Mr Peter White. Mr Keane refuses to acknowledge this version of events but accepts the bank may have misread the mood of the investment community when assembling the management team.

Mr Keane and his management team have done little to offend the investment community during the past 10 years, delivering good returns for shareholders. He recalls that even as the shares were falling in response to the negative sentiment surrounding the A&L deal last month, a report in the Financial Times showed the bank was one of the top three performing banks of those listed in London over a three- and five-year period.

But fund managers were unimpressed by many aspects of the deal, particularly that the bank would contemplate handing over the running of the enlarged entity to the former building society boss. While Mr White had a tough reputation and a track record for cutting costs his inexperience in running an organisation as complex as the Bank of Ireland was a big negative as far as the stock market was concerned. The bank's big investors wanted one of their team in charge.

"We were flattered by the views of the fund managers. We got a very strong message that they wanted to see key Bank of Ireland people at the helm of any enlarged group. I can see why the fund managers show an affinity. The management team here has been cohesive and in varying forms most of us have been around over the last decade."

Mr Keane recalls that one fund manager was so perplexed he asked whether the A&L deal was being done to recruit a new chief executive. "That was never the objective. We have a terrific team. On the corporate side we have done some very innovative deals. Those people are rocket scientists in comparison to people from a converted building society. I am not knocking a converted building society but just talking about what we have here."

Mr Keane says the primary lesson for the bank is to determine the culture and agree the umbrella body of corporate governance and the management team at an early stage in any future negotiations. "We would be wiser about issues that arise in a merger type situation. A lot of very good merger possibilities, particularly in the US and Britain, have foundered because of personalities and egos. Our starting point in looking at anything is to see if it makes business sense and is good for the stockholders. It was our view that no matter how well someone is reputed and no matter what their position that should not become an obstacle to the deal where it represents serious shareholder value. But it frequently does."

Another aspect of the merger which rankled with Bank of Ireland's customers and staff was the view that the bank would eventually be transformed into a British institution. Mr Keane insists that a London head-office was never on the cards and was somewhat taken aback by nationalistic protests.

"We would regard it as important that the bank's head office would be here. The issue had not been discussed by the time the merger was announced in May and never got resolved. But we believed that because Bank of Ireland is a more complex bank and as it is more significant in the Irish system it should be headquartered here."

Mr Keane stresses the bank must look to broaden its horizons beyond the Irish market if it is to continue to deliver value for its shareholders and is disappointed it was seen to be severing its Irish roots by expanding further in Britain.

"I don't think you think of Smurfit as a French or South American company even though the chief executive does not reside here and only 5 per cent of profits come from the Republic. I don't know how much of CRH's profits are outside of Ireland but nobody talks about it not being an Irish company."

At the moment Bank of Ireland holds more of its assets outside of the Republic. Mr Keane says he makes no apology for that as long as the business is growing here. "Because of our history Irish people think differently. And maybe their experiences with other retail businesses here isn't encouraging at the moment."

In some ways a takeover rather than a merger helps to assuage much of that sentiment and could also remove some of the other obstacles that beset any link with A&L. Mr Keane says that this could be an easier route for the bank albeit a more expensive one.

"If there was a menu that you could just pick something from, it would be very easy, but life isn't that simple. A number of interests, some of which are shareholders and some are national or Irish feelings prefer a takeover situation."

A takeover is more straightforward but are not always possible, he explains.

"It comes at a certain price and with a takeover premium. There may be some entities where it is not possible to mount a takeover for whatever reason. It may be that they value independence or semi-independence. One has to be somewhat pragmatic about it and try and get the trade off and see if any significant benefit can be gained from looking at a merger. If it is not possible to take it over rather than dismiss it totally one should see if there is some other way that one can go about this," he says.

Britain is still the most logical place for the Republic's second largest bank to realise its ambitions and it is prepared to bide its time to find the right deal.

The bank will be entering any future acquisitions or mergers from a very strong position, Mr Keane says. "Whatever we do we will always protect the home market on the basis that it is foolish to venture too far outside of it and we are not complacent about that."