B of I to sell 50% stake in EuroConex for €40m
Bank of Ireland has agreed to sell its 50 per cent share in card processing firm EuroConex Technologies for €40 million.
The stake is being purchased by Nova Information Systems, the firm that already owns the remaining 50 per cent of EuroConex.
A Bank of Ireland spokesman said the disposal formed part of the bank's strategy of concentrating on its "core" operations in the Republic and the UK.
"Broadly speaking, we consider ourselves not to be in that business," he said, noting that a similar motivation was behind a decision to sell the bank's motor insurance intermediary, Premier Direct, last week.
The spokesman accepted that Bank of Ireland was unwilling to allocate the resources to EuroConex that the company needed to fund expansion.
Mr Larry Broderick, general secretary of the Irish Bank Officials' Association (IBOA), was cautious on the reasons for the latest move, however, saying he would demand an urgent meeting with Bank of Ireland chief executive Mr Mike Soden on the matter.
He said the bank looked to be "selling all the silverware", adding that it was important to see where the "sell-off strategy" was going.
The IBOA is understood to represent fewer than 20 EuroConex staff.
EuroConex was established as a joint venture between Bank of Ireland and Nova about four years ago to offer processing services to financial services groups across Europe.
Bank of Ireland's entire credit card payment processing operation was outsourced to the firm. This will continue to be the case after the sale of EuroConex is concluded.
At the time of its foundation, EuroConex was expected to employ 500 people from its operational base in Arklow, Co Wicklow, within five years but staff numbers have yet to rise above 250.
EuroConex chief executive Mr Billy Saunderson yesterday predicted that this number would increase to 350 within nine months as the company embarks on a concerted international expansion.
It already operates in the Republic, the UK, France, the Netherlands and Spain, with further expansion to be fully-funded by Nova's US parent, US Bancorp.
The first signs of this strategy came last week when EuroConex announced plans to buy Polish card processor CardPoint from Bank Zachodni WBK, AIB's Polish subsidiary.
Mr Saunderson said two or three additional acquisitions were imminent