Bank of Scotland is the UK's oldest clearing bank, established in Edinburgh in 1695. With total assets worth £60 billion sterling (#91 billion), the bank is about 12 per cent bigger than the Republic's largest bank, AIB, which has about £64 billion (#81 billion) in assets.

Bank of Scotland is mainly based in Britain, with 420 branches, although it has an increasing presence in Australia through its ownership of the Bank of Western Australia (BankWest).

Earlier this year, it stumbled on the marketing front when it attempted to set up a telephone banking deal in the US with Dr Pat Robertson, the right-wing evangelist, and is believed to have paid him £2 million (#3 million) to exit from the deal.

Its entry into the Irish mortgage market follows its purchase of Equity Bank.

It is also understood to have made a bid for ICC Bank. Last April, it reported a 16 per cent rise in pre-tax profits for the year to February 28th of £1.01 billion sterling from £742 million the previous year.

AIB made a pre-tax profit of £826 million last year. Bank of Scotland operates a joint telephone banking.