Canadian bank mulls stake in Irish lender: reports

A major Canadian bank is considering taking a stake in Irish bank Allied Irish Banks PLC, according to multiple reports.

The Irish Times newspaper reported Friday that one of Canada's Big Five bankshas moved towardtaking a minority stake in the Irish lender. According to the report, the initial proposalcame in two weeks ago.

The Irish banking conglomerate put out a statement Friday confirming that it had been approached by an interested party about a possible minority stake.

"Any discussions with regard to this matter are preliminary and are not expected to progress in the near term," the bank said in a statement.

"There can be no certainty that these discussions will lead to a proposal to invest in the group or a transaction being concluded."

Early Friday morning, Dow Jones Newswires, citing unnamed sources within the bank, said the Canadian bank in question is the Royal Bank of Canada.

But the Globe and Mail, again citing unnamed sources at RBC, reported Friday thatCanada's largest bank is not currently mulling a purchase in the Irish bank. The Globe piecenamed the Canadian Imperial Bank of Commerce as the bank in question, again citing unnamed sources close to the matter.

Both CIBC and RBC have declined comment.

The rumoured foray has left some analysts scratching their heads as to why a Canadian bank would want to tread intothe Irish banking market.

"The reason expansion into European personal and commercial banking has traditionally not been viewed as likely for the Canadian banks was that the banks there are big and the market is mature and concentrated," Robert Sedran of National Bank Financial said in a note to clients.

AIB is in the midst of transfering loans toNational Asset Management Agency, a body the Irish government set up to handle toxic assets.