Allied Irish Banks has agreed to buy the mortgage finance business of the Baltic-American Enterprise Fund in a EUR 40 million deal, the Dublin-based company announced June 29.

The mortgage finance business, called AmCredit, was established in 1997 and operates in Latvia, Lithuania and Estonia. The Baltic-American Enterprise Fund itself was created in 1994 as a not-for-profit corporation with a USD 50 million investment from the U.S. Agency for International Development aimed at spurring development of the private sector in the three Baltic states. The fund’s headquarters is in Maryland.

AmCredit provides residential home loans and has 13 outlets and 145 staff members in the Baltics, according to a press release from Allied Irish Banks. The company expects to establish its own branches in the three countries and expand the range of products.

“We look forward to working with AmCredit’s management and staff in the development of the business in the years ahead,” Eugene Sheehy, CEO of Allied Irish Banks said in the press release. “AmCredit gives us an established foothold in the high-growth Baltic market and an opportunity to develop our business in a market contiguous to our Polish operations. We plan to grow its business and to expand the range of banking products sold into these new markets.”

As of September 2005, according to a Baltic-American Enterprise Fund annual report, the corporation had nearly USD 78 million invested in the Baltic states. Most of that, about USD 66 million, was in residential mortgage loans. Most of the investments, about USD 43.3 million, were in Latvia, followed by Estonia (USD 24.5 million) and Lithuania (USD 7.5 million).

Allied Irish Banks, formed in 1966, bills itself as Ireland’s leading banking and financial services organization. While its interests have been concentrated in Ireland, the United Kingdom and the United States, in 1995 it made its first foray into Eastern Europe by investing in a Polish bank that today is Bank Zachodni WBK, now one of the country’s largest.