Allied Irish Banks Plc agreed to buy 49.99 per cent in Bulgarian-American Credit Bank AD (BACB) from Bulgarian-American Enterprise Fund (BAEF), the Bulgarian bank said in a statement on February 22 2008.

The Irish financial group, headquartered in Dublin would pay 216.2 million euro for the stake, or 67 leva for each of the 6.31 million BACB shares it bought, while BAEF will retain a 3.89 per cent stake in BACB.

BACB said has been notified of the deal a day earlier, while Allied Irish Banks (AIB) said in a separate notice it would pay for the stake in cash. The deal is subject to regulatory approval from Bulgarian and Irish central banks.

"This investment is part of AIB's strategy for central and eastern Europe which involves acquiring and investing in businesses at reasonable valuations in targeted high growth markets," AIB Chief Executive Eugene Sheehy said. Ireland's biggest bank by market value already has operations in Eastern Europe, through BZWBK bank in Poland.

“We believe that, as a new strategic investor, AIB will bring the same high standards of entrepreneurial and operational excellence. The combination should benefit everyone – clients, employees, management and shareholders – indeed, this is a great day for everyone,” BACB CEO Frank Bauer said.

BACB, a small and medium enterprises specialist bank, had assets worth 358 million euro at end-2007, making it the 18th largest bank by assets in the country, and a net profit of 27 million euro. Set up in 1996, it has four branches, but its mobile lending consultants cover 15 Bulgarian cities.

AIB becomes the second Western European bank to buy into Bulgaria's rapidly growing lending market over the past 12 months. Last year, Belgium's second largest banking and insurance group KBC acquired 72% in Bulgaria's Economic and Investment Bank (EIBank), which had assets worth 1.98 billion leva at end-2007, for 295 million euro.