AIB wins Eurotop 100 spot boosting share price hopes

AIB has won entry to the FTSE Eurotop 100 index of leading European shares, raising hopes of a boost to the company's share price.

The bank was one of seven companies entering the list in the annual review of the index. It enters the Eurotop 100 at number 93.

Rival Bank of Ireland was included on the reserve list of companies that would replace any companies falling out of the index prior to its next review.

The Eurotop 100 is a list of the 100 leading European companies by market capitalisation. AIB is the only Irish company on the list, although it has been a member of the Eurotop 300 index.

Sources within AIB last night played down the significance of its accession to the Eurotop 100, though they agreed membership would put it on the buying list of those fund managers running investments that track the index's progress.

Membership of leading indices of European shares has previously brought mixed fortunes to AIB.

It was a member of the Dow Jones Eurostoxx 50 index on leading euro-zone companies in 1999 but suffered a sharp fall ahead of a decision to relegate it from the index in June 1999.

Again in 2002, it slipped almost 10 per cent after it became apparent it would not gain re-entry to the index that year. There is speculation that AIB might again be close to securing a spot in the Eurostoxx 50 when its constituents are reviewed later this year.

The Eurostoxx 50 and the Eurotop 300 are considered the benchmark indices in Europe for the purpose of index trackers and those institutions operating on a pan-European basis rather than picking stocks by country.

Separately, yesterday, AIB announced a 0.8 percentage point cut in its business lending rate in a move aimed at securing more of such business. The bank also announced a 0.6 percentage point reduction in its personal loan rate.

The cuts bring the rates to 8.5 per cent and 9.45 per cent respectively.

Overdraft rates have also been cut with the business rate falling 0.3 of a percentage point to 8.6 per cent and the personal rate falling by an identical amount to 10.7 per cent.

The cuts come in the wake of the 0.5 of one percentage point cut announced by the European Central Bank.