Confirmation of the purchase of TSB Bank by Irish Life & Permanent is thought to be imminent. An announcement to the Irish Stock Exchange could come as early as this morning.

The precise terms of the deal, which requires Government approval, were not immediately clear last night. The life assurance and banking group was the only bidder for TSB, the largest State bank, last month when an expected bid from AIB failed to materialise. Its offer is believed to value the bank at £330 million (€419 million).

The acquisition was an important strategic objective for Irish Life & Permanent as it would give it access to the bank clearing system and a significant branch network.

TSB has 80 branches with a high concentration in the Cork, Waterford, Limerick and Dublin areas. Irish Permanent also has around 80 branches but is implementing a €35 million rationalisation plan that involves the closure of 10 branches in Dublin. Another seven around the Republic will be converted to agencies and other measures are being implemented to improve efficiency.

Irish Life & Permanent has signalled that, if successful, TSB chief executive Mr Harry Lorton would head the group's retail banking operations and join its board of directors. It announced that Irish Permanent chief executive Mr Billy Kane would leave the firm next year.

Mr Kane (45) runs its banking operations and his departure would leave the way clear for Mr Lorton to take on this role in the enlarged banking group.

Irish Life & Permanent's bid for 100 per cent of the TSB. The State bank's 1,200 staff will shortly ballot on the terms of an employee share option plan which entitles them to a 14.9 per cent stake in the bank.

In line with ESOPs in other State-owned organisations, TSB's staff will provide for the acquisition of a 5 per cent stake by an employee trust in consideration for a change and flexibility agreement between the bank and its trade union. A further 9.9 per cent interest will be made available for purchase by staff. At a purchase price of £330 million, a 5 per cent stake would be worth £13,750 to each of the TSB's 1,200 staff.

The remaining 9.9 per cent available under the ESOP to staff would be worth a further £33 million, with employees being given the option to purchase shares at preferential rates and with a remainder also expected to be earmarked to be offered in exchange for possible rationalisation and restructuring in the future.

Any sale is conditional on recognition of the ESOP and the bank has also sought assurances that their would be no compulsory redundancies.