Joe Higgins, chief executive of Bank of Scotland Ireland (BOSI), claimed last week that even after the painful decision to axe 750 jobs and close its Halifax branch operation, the lender would be around in Ireland for another 70 years.

Having received a capital injection of nearly €3.5bn from its British parent, Lloyds Banking Group, in little over a year, it was a bold claim.

Executives at other banks and analysts now expect the remnants of BOSI, principally its commercial banking arm, to attract bids either from rival lenders or, potentially, private equity bidders.

One senior executive at a large foreign bank, who asked not to be named, told the Sunday Tribune that when BOSI's property development loans are excluded there would be strong interest in its commercial loan portfolios. The executive said the backbone of BOSI's commercial loan book is the old ICC Bank (bought from the government in 2002), which would prove attractive to anyone looking to increase their share of the SME business banking market.

After the Halifax branches, personal banking and asset finance divisions are closed in the summer, Bank of Scotland Ireland will still have about €32bn of assets. Included in this is about €10bn in mortgages, which the bank said it plans to retain.

While there has been some speculation that BOSI may be prepared to offload the mortgage book, the commercial portfolios are seen as a more desirable asset given the challenges facing the mortgage market from higher unemployment and expected increases in interest rates.

BOSI shipped heavy losses in 2008, and while its 2009 results will not be released until later this month, Lloyds has already warned that it expects high impairment charges at the division, and they will continue for some time as it deals with the fallout from the collapse of the property market and its exposure to developers.

Analysts said stronger institutions across Europe, such as HSBC, Barclays and Spain's Santander, have been active in picking up unwanted divisions of struggling banks or assets forced on the market by the European Union, which is ordering banks to make divestments in return for approving state aid and government rescues. Barclays last week paid €234m for the Italian credit card operation of Citigroup.

HSBC and Barclays are already active in Irish business banking. The two lenders have avoided the worst of the financial crisis (neither institution needed a government bail­out) and both are understood to be keen to expand their operations in Ireland. It isn't just rival lenders that are interested in swooping on banks these days. Private equity firms have been active since the credit crisis began in late 2007 in buying loan portfolios.

The problems facing BOSI couldn't have come at a better time for Elkstone Capital, the finance vehicle backed by former IBI Corporate Finance director Chris O'Connell and former EBS finance director Alan Merriman, which recently opened its doors for business.

Analysts said another attempt to put BOSI into the long-mooted third force in Irish banking, comprising Irish Nationwide, EBS and Permanent TSB, is unlikely. For a start, months of talks have so far not led to any concrete proposals for the third force, and future regulatory changes may make the deal less appealing for Lloyds Banking Group.

"It is possible that the new Basel reforms, which propose to deduct minority interest from capital, also reduce the attraction of such a deal for its parent," NCB Stockbrokers banking analyst Ciaran Callaghan said.

The bank has not confirmed that it held any talks with the government or other institutions about joining the third force.

While Lloyds executives expressed ongoing financial support for BOSI in Dublin last week at the announcement of the cuts, it too faces pressure to reduce its losses after receiving a chunk of British taxpayers' money. The British government wants to exit its 43% stake in Lloyds at a profit in the next three to five years.

Higgins himself said he expects to "spend the next few years with guys knocking on our door" with offers for the remaining business. He said there is a "clear plan" for the future of Bank of Scotland in Ireland, but it always has to consider any offers that might allow it to "maximise value" for its parent.