Allied Irish Banks gets approach

By Andras Gergely and Padraic Halpin

DUBLIN (Reuters) - Allied Irish Banks received an approach from a third party for a minority stake, it said on Friday, in what could indicate scope for recovery among Irish banks which have been pummelled by the credit crisis.

Two sources familiar with the matter said the interest came from Canada, though Canada's biggest bank Royal Bank of Canada (RBC) said it was not behind the approach for Ireland's second biggest bank, whose shares closed up more than 6 percent.

Irish state broadcaster RTE reported, without citing any sources, that Canadian Imperial Bank of Commerce had made an approach. A spokesman for CIBC said the bank did not comment on rumours or market speculation.

The Irish bank confirmed it had received an approach but said talks were not expected to progress until there was more clarity on the National Asset Management Agency (NAMA), a "bad bank" set up by the government to remove banks' risky assets.

"Allied Irish Banks notes the recent press comment regarding interest from a third party taking a minority stake in the group and confirms that it has received such interest," it said.

Sources familiar with the matter told Reuters Allied had received an approach from Canada. Royal Bank of Canada denied being in talks with Allied. "We are definitely not involved in this deal," a representative of RBC said.

Earlier on Friday, the Irish Times said the potential suitor was believed to be one of top five Canadian lenders, which after RBC and CIBC are Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia.

Robert Sedran, a banking analyst at National Bank Financial in Toronto, said RBC still looked the most likely contender.