M&T Bank, the US bank in which AIB has a stake of almost 25 per cent, is buying another upstate New York bank for $555 million (€402 million).

The deal to purchase Partners Trust will add 33 branches to M&T's network and $2.26 billion in deposits to its portfolio of business. Partners Trust has net loans of $2.26 billion and assets of $3.65 billion.

M&T said the merger would give it the largest share of deposits in one part of New York State and strengthen its leading position in another.

M&T chief executive Robert Wilmers said the purchase represents "an expanded commitment" to upstate New York. Last July, M&T bought 21 upstate branches from Citigroup, adding about $1 billion of deposits and $269 million of loans.

The bank has a stated commitment to expand through acquisition in its core business areas.

The latest deal is on track to close within about six months, pending shareholder and regulatory approval, and add to 2008 operating earnings per share.

M&T has $57.9 billion of assets and more than 650 branches in seven mid-Atlantic states and Washington, DC.

As well as AIB, the bank's shareholders include Warren Buffett's Berkshire Hathaway.

M&T will pay a mixture of shares and cash for the purchase.

Davy noted yesterday that the transaction would probably dilute AIB's holding in M&T from 24.9 per cent to about 24.3 per cent.

M&T accounts for about 7 per cent of AIB's group profits. - (Reuters)