Financial services group IFG has acquired a Jersey-based trust company from Bank of Scotland for £6.6 million (€9.59 million).

Bank of Scotland Trust Company (International) Ltd will be integrated within a fortnight into IFG's existing trust service business, IFG Trust (Jersey) Ltd. It will operate under IFG's international trustee and corporate services division.

IFG chief executive Richard Hayes said the European and British client base of the Bank of Scotland company will complement the US and Asian client base in the IFG operation.

The company provides trust and administration services to 269 companies, trusts and other entities.

Its clients have underlying assets valued at about £340 million.

IFG is taking on the 12 staff in the business and the company will be the preferred supplier of trust services to Bank of Scotland for the next three years, Mr Hayes said.

The transaction was finalised shortly after the market closed for the Christmas break last Friday. It will be "roughly 5 per cent earnings-enhancing" in a full year, Mr Hayes said. "It will add about ¾ of one cent to earnings per share."

The latest available annual accounts for Bank of Scotland Trust Company (International) show that it had a turnover of £1.34 million in the period to December 2004 with pretax profits of £659,000.

IFG acquired net assets of £3.09 million in the transaction, including cash and bank balances of £2.82 million. This means its upfront cost after expenses in the deal are around £3.7 million.

The company paid an initial price of £6.59 million in cash and the outstanding balance will be calculated as the equivalent of the Bank of Scotland company's pretax profit in the three weeks to December 22nd from December 1st.

While a maximum of £6.8 million was put on the consideration, Mr Hayes said the projected profit in December meant that the price will ultimately settle at some £6.6 million.

The transaction was under discussion for about three months, Mr Hayes said. Bank of Scotland had credibility in the market and the trust business was very solid because clients tended to maintain service contracts for 15-20 years.

IFG shares closed three cent down at €1.40 in thin trading on the Dublin market yesterday.