TIDMAIBG
RNS Number : 9083C
AIB Group PLC
23 June 2021
23 June 2021
This announcement is being released under AIB Group plc and is
identical to that that issued under Allied Irish Banks, p.l.c.
earlier today
AIB forms JV with Great-West Lifeco to provide life, pension and
investment solutions
Allied Irish Banks, p.l.c. ("AIB")[1] today announces that it
has reached an agreement to form a joint venture with Canada Life
Irish Holding Company Limited ("Canada Life"), a subsidiary of
Great-West Lifeco Inc. It is intended that the business' operations
will be conducted through a joint venture vehicle owned 50% by AIB
and 50% by Canada Life.
The move to create this joint venture is aligned with AIB's
stated ambition to complete its customer product suite and
diversify income. Through this strategic initiative AIB intends to
offer customers a range of life protection, pensions, savings and
investment options enhanced by integrated digital solutions with
continued access to our qualified financial advisors.
Following a competitive and comprehensive selection process, AIB
chose Canada Life given its broad expertise which will be key to
the long-term success of the newly formed joint venture business.
Canada Life has deep experience in the Irish bancassurance market
through Irish Life Assurance plc ("Irish Life"), a subsidiary of
Great-West Lifeco.
Colin Hunt, Chief Executive Officer of AIB, said:
"Today's announcement marks another key milestone in the
delivery of AIB's strategy to enhance and diversify our revenue, to
become a full provider of financial services for our customers and
to build long-term, sustainable profits for our shareholders. This
deal moves AIB beyond a distributor model to create a strong
strategic alliance that marries the product and services expertise
of Great-West Lifeco with AIB's market-leading customer franchise,
technology and distribution. It will allow our customers to plan
their finances and investments and puts us at the heart of our
customers' financial lives."
AIB currently operates under a tied agency distribution
agreement with Irish Life. AIB will enter into a new distribution
agreement with the new joint venture company. Through enhanced
customer engagement and increased product sales, AIB expects the
new joint venture to further improve non-interest income from
distribution commission. The existing agreement is to remain in
place until the launch of the joint venture.
Due to the "green field" nature of the initiative, associated
set-up costs and the long-term nature of the products, AIB expects
the joint venture to deliver a meaningful financial contribution in
the medium to long term. AIB anticipates its equity investment will
be c. EUR90 million, equating to c. 10bps CET1. This investment
will cover AIB's share of the set-up costs and regulatory capital
required for the joint venture.
Declan Bolger, Head of Great-West Lifeco's operations in
Ireland, said:
"We are delighted to be deepening our strategic partnership with
AIB through the establishment of this new joint venture company. It
is an excellent strategic fit for Great-West Lifeco and aligns with
our long-term plans for diversified growth in the Irish market. We
are excited by the opportunity to create a new venture serving the
needs of AIB's customers and leveraging the strengths of our group
to provide innovative life, pension and investment solutions."
The joint venture will be incorporated under Irish law and seek
to become a life insurance undertaking regulated by the Central
Bank of Ireland, ("CBI") and will be required to satisfy certain
conditions prior to approval. Competition clearance will also be
sought from The Competition and Consumer Protection Commission
("CCPC"). Regulatory submissions are expected to be filed in H2
2021 and subject to approval from the regulatory bodies, it is
anticipated the joint venture could be launched in H2 2022.
Ends
Contact details:
Niamh Hore / Janet McConkey Paddy McDonnell / Graham Union
Investor Relations Media Relations
AIB Group AIB Group
Dublin Dublin
Tel: +353-1-6411817 / +353-1-6418974 Tel: +353-87-7390743 / +353-1-6412430
email: niamh.a.hore@aib.ie email: paddy.x.mcdonnell@aib.ie
janet.e.mcconkey@aib.ie graham.x.union@aib.ie
For Great-West Lifeco media enquiries, please contact:
Morwenna Rice, Director, Drury PR | M +353 86 194 0069 |
morwenna.rice@drury.ie
Forward Looking Statements
This document contains certain forward looking statements with
respect to the financial condition, results of operations and
business of AIB Group and certain of the plans and objectives of
the Group. These forward looking statements can be identified by
the fact that they do not relate only to historical or current
facts. Forward looking statements sometimes use words such as
'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend',
'plan', 'goal', 'believe', 'may', 'could', 'will', 'seek',
'continue', 'should', 'assume', or other words of similar meaning.
Examples of forward looking statements include, among others,
statements regarding the Group's future financial position, capital
structure, Government shareholding in the Group, income growth,
loan losses, business strategy, projected costs, capital ratios,
estimates of capital expenditures, and plans and objectives for
future operations. Because such statements are inherently subject
to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward looking
information. By their nature, forward looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward looking
statements. These are set out in the Principal risks on pages 50 to
53 in the 2020 Annual Financial Report. In addition to matters
relating to the Group's business, future performance will be
impacted by direct and indirect impacts of the COVID-19 pandemic
and by Irish, UK and wider European and global economic and
financial market considerations. Any forward looking statements
made by or on behalf of the Group speak only as of the date they
are made. The Group cautions that the list of important factors on
pages 50 to 53 of the 2020 Annual Financial Report is not
exhaustive. Investors and others should carefully consider the
foregoing factors and other uncertainties and events when making an
investment decision based on any forward looking statement.
[1] Subsidiary of AIB Group plc
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END
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