AIB to sell its 49.9% stake in merchant services joint venture

AIB has agreed to sell its 49.9 per cent stake in AIB Merchant Services, which helps businesses accept card payments from customers, to its joint venture partner, the US financial technology group Fiserv.

The Irish bank booked €34 million of income from its minority stake in 2024. The transaction will have the effect of boosting AIB’s capital reserves – measured as common equity Tier 1 – by 0.35 of a percentage point, it said in a statement. This equates to about €215 million.

Goodbody Stockbrokers analyst Denis McGoldrick estimates that two-thirds of the capital boost will come from a gain from the sale, with the remainder resulting from a release of regulatory capital reserves held against the asset.

Founded in 2007, as a joint venture between AIB and Fiserv, AIB Merchant Services (AIBMS) is one of Ireland’s largest payment solution providers and one of Europe’s largest ecommerce acquirers, providing businesses with the ability to accept card payments from their customers.

The Irish-based company revolutionising rural deliveries with drones and robotic hubs

Shelfy review: Can this device keep food in your fridge fresh for longer?

Are fears of an AI slash and burn of white-collar roles well founded?

There will be no day-to-day change for AIBMS customers as a result of this announcement and no customer action is required, AIB said in its statement.

AIB will continue to work with AIBMS and Fiserv by referring AIB customers who require these services to the company. AIBMS will continue to operate as AIBMS, under a short-term brand agreement, allowing for an orderly exit of the AIB brand from the business.

“Following a successful joint venture partnership, we believe Fiserv has the commitment, experience and innovative technical solutions to grow AIBMS and that our customers will continue to be well-served under their sole ownership,” AIB chief executive Colin Hunt said.

The transaction is expected to be completed later this year subject to relevant regulatory approvals.

“This transaction makes sense for AIB from both a strategic and financial point of view,” said Mr McGoldrick. “AIB’s focus is on delivering enhanced customer outcomes, financing the green transition and operational efficiency and resilience, so a merchant servicing business no longer fits well within those ambitions.”