AIB has agreed to sell its 50 per cent stake in a fund administration company to its joint venture partner, Bank of New York.

The business, which is located in Ireland, has $210 billion (€164 million) in assets under administration. AIB did not disclose the purchase price but said the profit and capital impacts would not be material for the group.

Some 600 people are employed in the business and are based in Dublin and Cork. They will join the Bank of New York group when the transaction is completed.

The deal will require regulatory approval and is expected to be completed by the end of the third quarter of 2006.

AIB/BNY Securities Services (Ireland) Ltd was established in 1995 to provide a range of services for a number of fund structures domiciled in Ireland.

At the end of October 2005 it had net assets of $28.8 million.

Commenting on the sale yesterday, AIB's head of investment banking, Mon O'Driscoll, said the agreement was a natural and correct strategic decision for AIB and Bank of New York.

"Having reached significant scale, it was natural for both parties to strategically review the partnership and decide how best to continue and develop the business," Mr O'Driscoll said.

He added that continued success in the increasingly global custodial and funds administration business required the focus and expertise of a company offering the scale and international presence of Bank of New York. "With its commitment to Ireland as a key part of its global funds administration platform and its long and impressive track record as a leading provider of securities service, Bank of New York is ideally suited to take full control of the joint venture and ensure its further development and success," Mr O'Driscoll said.