The merger of TSB Bank and ACC Bank and the flotation of the merged operation on the stock market now appears to be on the cards for late 1999/early 2000.

With the banks now agreed on a merger plan and about to put their proposals to the Minister for Finance, Mr McCreevy, for approval, the complicated process of merging the banks and preparing the merged entity for flotation can get under way. The process is expected to take 12 to 18 months.

The merger will involve rationalisation of the banks which are both relatively high cost operations. Involuntary redundancies are not expected because of the additional work required for the merger and flotation as well as natural wastage in the banking industry.

While the unions at both banks have been involved in discussions as the proposals were developed, the unions at TSB have now appointed an adviser to examine the proposals on behalf of the staff.

There will have to be product rationalisation as well as decisions about the corporate headquarters - which is expected to be the ACC's new offices in Charlemont Place in Dublin rather than TSB's new headquarters in Blackrock.

But agreement on a plan for the future must be a relief for both banks at this stage. They have come through a long period of uncertainty since 1993 when ACC, together with TSB, ICC and An Post were part of a proposed State-owned third banking force, and 1994, when TSB was the subject of a bid by National Australia Bank.