The hot seat will be handed back to the former M&T CEO and current chairman, 72year-old Robert Wilmers, who is also a director of AIB.

Analysts last week expressed surprise Sadler's retirement and also at Wilmers' return to the position. Sadler, who has been with M&T since 1983, will remain as vice chairman of both M&T Bank and its parent, M&T. He described his decision to relinquish his role as "very personal".

Analyst Joseph Fenech, at Sandler O'Neill & Partners, said the longer-term succession plan at the company is "less clear than we had assumed".

New York-based M&T acquired AIB's Allfirst subsidiary in 2003 for $3bn following the John Rusnak scandal that saw the trader chalk up losses of almost $700m. AIB holds a 20% stake in M&T.

M&T Bank recently said it will expand its network of 676 branches by opening five or six branches a year from 2007. There is a market expectation that M&T may have plans for additional acquisitions, a move that may prompt AIB to re-evaluate its holding.

Wilmers is a neighbour of former AIB chairman Lochlann Quinn. They own adjoining vineyards in France.