Allied Irish Bank, commended in the Global Custodian agent bank survey in each of the last three years, is now the subject of takeover speculation. Floored by lapses in internal controls which allowed a single currency trader to rack up losses of $691 million over five years at its American subsidiary, the Irish bank is now battling to preserve its independence.
Failing to dismiss senior management in the wake of the Ludwig inquiry has failed to restore confidence in the leadership of the bank, and its sound core businesses are attracting interest from potential British buyers at a time when the AIB share price is depressed and they are looking for new avenues of expansion in retail banking. The Irish authorities may either rule out a bid or prefer to encourage a tie-up with rival Bank of Ireland.