CITIZEN'S Financial Group, the US bank 23.5 per cent owned by Bank of Ireland has acquired a savings bank in Connecticut for £35 million.

The purchase of Farmers and Mechanics Bank is the first acquisition by Citizens Financial Group since Bank of Ireland merged its New England operation, Bank of Ireland First Holdings, with the Royal Bank of Scotland owned Citizens Financial Group in December.

The move is within the strategic parameters agreed between Bank of Ireland and Royal Bank of Scotland, Mr Paul D'Alton, the chief financial officer of Bank of Ireland, said. The 12 branches of Farmers and Mechanics Bank will complement the 18 branches of Citizens in the State, he said.

Farmers and Mechanics has $540 million in assets and the combined Connecticut operation will have assets of $1.29 billion. The acquisition will be funded by Citizens out of its own resources and there will be no recourse to Bank of Ireland or Bank of Scotland, said Mr D'Alton.