AIB In Talks To Sell Troubled Allfirst
Allied Irish Banks confirmed on Thursday that it is in talks with New York-based
M&T Bank Corp over 'a possible partnership' involving its troubled US subsidiary,
Allfirst. Allfirst hit the headlines in February of this year, when it was discovered
that foreign exchange 'rogue trader', John Rusnak had accrued $691 million worth
of damage as a result of flawed trades over a period of several years. An internal AIB investigation concluded that poor management and financial
controls had contributed to the crisis, and Allfirst Chairman, Frank Bramble,
and Chief Executive, Susan Keating subsequently resigned, although AIB denied
that this was as a result of the Rusnak losses. However, despite this, AIB was yesterday said to be 'close to a deal' with
M&T Bank. RTE Interactive News reported on Thursday that under the terms of the proposed
deal, 'AIB would transfer complete ownership of Baltimore-based Allfirst to
M&T in return for a 22.5% stake in M&T. AIB would also receive up to
four seats on the New York Bank's board. .
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