BANK of Ireland has passed out its main rival AIB to become the largest financial institution on the Irish Stock Exchange. The gap in the value of the two banks has been narrowing for months as the Bank of Ireland share price outperformed that of AIB.
Bank of Ireland's market capitalisation - its value on the stock market - reached £2,668,05 million yesterday making it worth just £5.46 million more than AIB which was worth £2,662.59 million at the close.
In strong trading yesterday Bank of Ireland rose 10p to close at 550p. With 485.1 million shares in circulation, the price increase pushed the market value of the bank just over £2.668 billion. AIB closed just 0.25p up at 391.5p. With 680.1 million shares in circulation, the market value of the bank was above £2.662 billion.
Bank of Ireland shares have put in a very strong performance in recent months, moving from a low of 402p in 1996 to close the year at 538p.
The shares have been boosted by the strong recovery in earnings in recent years after earlier troubles in the US, strong growth in the domestic market and market approval of the move to take over British building society Bristol & West.
Since the start of new year trading, the shares have continued to power ahead, with dealers attributing gains to shortages of stock and even favourable mention by fund managers in an international magazine survey.
In the year to end March 1996, Bank of Ireland reported pre tax profits of £363.7 million, up from £321.8 million, and brokers are forecasting an outcome of about £396 million for the current year.
Although only one indicator, the earnings per share for Bank of Ireland in last year's results were higher than the comparative figure for AIB.
Bank of Ireland is smaller than AIB in asset terms, with total assets of £21 billion, compared to AIB's June 1996 figure of almost £26 billion.
Earnings have grown strongly at AIB in recent years but the bank did not have the advantage of the bounce back from the heavy losses in the US experienced by Bank of Ireland.
AIB reported pretax profits of £373 million for 1995, up from £341 million in 1994 and brokers are forecasting a result of around £415 million for 1996.
