Bank of Ireland is making no secret of its ambitions to become a substantial player in the British market. Group chief executive Mr Maurice Keane says it is now the most "logical" place for the bank to expand its horizons. Apart from ICC Bank, there are no other prospects left for the bank to consider in the Irish market, he said yesterday.

The Republic's second-largest bank refused to comment on whether it was currently in discussions with a potential suitor in the British market. It has been suggested as a potential bidder for Britain's second-last remaining building society, the Bradford and Bingley - and for a number of other British institutions - but refused to be drawn on the subject yesterday. The society's members voted last month to change its mutual status, leaving the way clear for an institution such as Bank of Ireland to make a bid.

Bradford and Bingley would be expensive, with analysts putting a likely price tag of around £2.5 billion (€3.17 billion) on it. However, funding such a move would not be a problem. Bank of Ireland is sitting on an enormous surplus capital - with well over £800 million at its disposal - and is well placed to raise further funds, if the right acquisition were found. Mr Keane said the bank is ideally looking for a business with synergies to its Bristol & West subsidiary. "Diversity of earnings is something that appeals to us throughout the group and would be a very important consideration in making an acquisition," he explained.

Given its ambitions and its cash surplus, the bank would obviously be keen to make an acquisition sooner rather than later. Mr Keane said it would be very difficult for the bank to justify sitting on its surplus capital for more than two years, but stressed that it would ultimately depend on what opportunities arose.

Goodbody Stockbrokers analyst Mr Oliver O'Shea believes the bank will have to be seen to do something big in Britain and add greater scale in that market, to cross-sell its products. Smaller banks, he says, don't put themselves into play at an early enough stage for an institution like Bank of Ireland to be able to add sufficient value. The Bradford and Bingley has an estimated market share of around 15 per cent. Analysts suggest it is almost certainly on the bank's list of potential acquisitions.

Mr Keane suggests that the bank still harbours ambitions to become a larger player in the Northern Ireland market and will also take a look in earnest at the State-owned ICC Bank, when the Government puts it out to tender in the coming months. It is expected to be purchased for £250-£300 million and Bank of Ireland has long been seen as one of the leading likely bidders.

"We are interested in growing our business banking and would be happy to be strong in that sector. When ICC is offered for sale we will look at it," he said. While the bank is viewed as one of the frontrunners to buy ICC, it is likely to face strong competition from some foreign institutions.