Denmark's largest bank, Danske Bank, has agreed to buy National Irish Bank (NIB) and Northern Bank from National Australia Bank for about £1 billion (€1.44 billion).
Danske Bank - which has 600 branches and around three million retail customers in Denmark, Norway and Sweden - noted the High Court Inspectors' investigation into the activities of National Irish Bank between 1988 and 1988.
"The vendor, National Australia Bank, has agreed to fully indemnify Danske Bank if there are any liabilities relating to those investigations. No such liabilities are anticipated," it said.
Danske Bank plans to reduce costs at the bank by 15 per cent within three years.
The bank said it would also spend €69 million over the next 15 months on new technology in the two banks, adding that this would substantially improve profitability.
Danske Bank chief executive, Mr Peter Straarup said he planned to expand NIB's branch network in the Republic.
"The economy of the Republic of Ireland continues to outperform other European economies, and NIB has considerable growth opportunities," he said.
Mr Don Price, the current chief executive of National Irish Bank, will be moved to the Danske Bank's executive committee.
NIB has 134,000 retail customers, and lending of €2.9 billion. Northern Bank has 349,000 retail customers, and lending of €4.6 billion.
IBOA general secretary, Mr Larry Broderick, described today's the sale of National Irish and Northern Banks as "a positive development that will bring a sense of welcome relief to staff".
The deal is Danske Bank's first big acquisition outside its home market of Scandinavia. Danske said it expected a positive effect on its earnings per share from 2006, once the transactions are approved by authorities by the end of the first quarter of 2005.