And in further signs of rapprochement, it has emerged that IL&P will underwrite the mortgage protection insurance that Bank of Scotland plans to sell alongside a new range of home loans to be launched this week.

The clubby world of banking was rocked two weeks ago when Niall O'Grady, head of marketing at IL&P's banking arm, Permanent TSB, took aim at Bank of Scotland and Ulster Bank, which is owned by Royal Bank of Scotland.

"Our Celtic cousins [have] delusions of heroism when it comes to Ireland, " O'Grady said. "Maybe it's something in the water but all these Scottish-owned banks think they're solely responsible for competition in Irish banking."

Duffy responded tonguein-cheek last week by dispatching a bottle of 15-year -old Scotch malt whisky to O'Grady's office along with some Scottish spring water, presumably to allow him search for any differences between it an its Irish equivalent.

The olive branch will be welcomed by O'Grady's colleagues at Irish Life, whose mortgage protection book will benefit nicely from Duffy's efforts to grab a bigger slice of the home loans market.