Bookmark and Share

AIB sacks six executives over trading losses at Allfirst

Irish bank AIB, which has been at the centre of one the biggest banking fiascos since Barings, has sacked six executives at their American subsidiary Allfirst.

The job losses were announced following the publication of US banking expert Eugene Ludwig's 30-day examination of the $691 million trading losses incurred at Allfirst.

AIB blames the alleged fraud at its Allfirst division on the actions of currency trader John Rusnak, who has already been dismissed. The bank has accused him of forging documents in order to conceal trading losses incurred between 1997 and 2001.

Six staff at Allfirst have been fired, including the head of treasury, David Cronin, and Lawrence Smith, John Rusnak's immediate superior. The retirements of both Frank Bramble, head of AIB's US operations and Pat Ryan, AIB's Group Treasurer, were announced in January and will take effect from June. Susan Keating will keep her job as Chief Executive Officer of Allfirst.

Eugene Ludwig's report found that John Rusnak was involved in the falsification of bank records and documents but that nobody inside or outside AIB had any knowledge that fraudulent trading was occurring at Allfirst. The report also found that supervision at Allfirst was weak and failed to monitor Mr Rusnak's trading over an extended period.

Mr Ludwig also found that there was a lack of appreciation at AIB Group level of the risks associated with hedge-fund foreign exchange trading.

Both AIB Chairman, Lochlann Quinn and Chief Executive Michael Buckley, offered their resignations to the board of AIB on Tuesday 12 March, but were asked to stay on, with full approval from the board.

AIB has appointed Eugene Sheehy - formerly managing director AIB Republic of Ireland - as CEO of AIB USA and Executive Chairman Designate of Allfirst. AIB has also said the positions of Chief Risk Officer and Head of Group Internal Audit will be filled by external appointees. All proprietary trading at Allfirst and AIB's Polish divisions will cease.

The FBI is conducting a criminal investigation into the losses at Allfirst.


Related Northern Ireland News Stories
Click here for the latest headlines.

24 February 2016
Over £7m From Dormant Bank Accounts To Fund Community Projects
Community groups in Northern Ireland are to benefit from £7.1 million from dormant bank and building society accounts to finance local projects. Finance Minister Mervyn Storey made the announcement and said the Community Finance Fund will "improve access to finance for a range of organisations across the third sector".
27 March 2013
AIB Records €2.8bn Loss In 2012
Allied Irish Banks, the parent company of Northern Irish bank First Trust, has announced an operating loss of €2.8bn for 2012. There was a €2.9bn (5%) growth in customer accounts in 2012, despite the announcement to close certain offshore businesses.
25 October 2002
AIB fraudster jailed for seven years
A former currency trader has been jailed for seven years for his part in one of the largest bank frauds in history. John Rusnak pleaded guilty to bank fraud over the trading scam that cost Allied Irish Banks (AIB) nearly $700 million in trading losses.
27 January 2016
Xtra-Vision Ceases Trading
Rental chain Xtra-Vision is to close 11 stores in Northern Ireland, with the loss of around 60 jobs. The firm was placed into liquidation on Wednesday morning. In total, approximately 580 workers are expected to lose their jobs in the Republic of Ireland and Northern Ireland, and a further 71 stores are to shut down in RoI.
11 March 2016
Up To 60 Jobs To Be Axed At Harland & Wolff
Around 60 jobs are to be axed at Belfast engineering firm Harland & Wolff. The company is blaming the move on the downturn in the offshore oil and gas sector.
18 February 2016
Bombardier Job Losses 'Deeply Disappointing'
The news that Bombardier is to reduce its workforce in Northern Ireland have been described as "deeply disappointing" and "extremely regrettable", by Enterprise, Trade and Investment Minister Jonathan Bell and Minister for Employment and Learning, Dr Stephen Farry.
02 March 2010
Bank 'Blames NAMA' For Huge Losses
A bank that trades across the whole of Ireland has revealed shocking losses. Troubled AIB's Northern Ireland business, First Trust, lost £86m alone - compared to a £33m profit in 2008. However, the bank's performance in the Irish Republic was disastrous with total losses there reaching 3.5bn euros.
05 August 2009
Irish Bank Losses Rising
Northern Ireland's First Trust Bank has lost £41m, according to the latest financial statement. The report also detailed how this led to a £28m loss at the parent company Allied Irish Bank group's UK operation. AIB in The Republic has also reported a pre-tax loss of €872m for the first six months of its financial year.
01 August 2001
AIB post strong first half year profits
Allied Irish Bank A (AIB) have posted promising first half profits attributing them to a strong performance from its Ireland and UK operations. The Dublin based bank have apparently shook off the effects of economic slowdown to record a pre-tax profit for the six months to June 30 of £409.8 million which is up from £374.1 million last year.
12 April 2011
AIB Job Cuts 'Outrageous Blow'
The 1,400 bank workers at First Trust in Northern Ireland are today worried about their future following an announcement that at least 2,000 more jobs are to be axed by its parent business AIB Group by the end of 2012. The move has been called "an outrageous blow" to staff, according to Larry Broderick, General Secretary of IBOA, the Finance Union.
31 March 2011
Irish Bank 'Stress Tests' To Be Published
Trading in the Bank of Ireland and AIB has now been suspended for 24 hours. The move comes ahead of the publication of crucial stress tests today by the government. The full extent of financial trouble within the banks will be detailed late this afternoon.
14 December 2010
NI Hit As Brian Blocks Bank's Bonus Bonanza
The Irish Republic's Finance Minister has blocked the payment of €40 million in bonuses by the State dependant Allied Irish Banks (AIB). It has also emerged that almost 50 First Trust staff in Belfast will miss out on their Christmas bonus after the parent company was prevented from paying any incentives.
10 July 2015
Road Users Urged To Take Care Over Bank Holiday Weekend
Drivers and the public are being urged to take care on the roads over the Bank Holiday weekend. Environment Minister Mark H Durkan said: "We cannot afford to be complacent." He added: "More children will be walking and cycling and many families will be out and about enjoying the break.
27 July 2012
AIB Branches To Close Across Ireland And NI
Nearly 70 branches of Allied Irish Banks are to close in Northern Ireland and the Republic. The bank confirmed that 51 locations will shut up shop by the end of the year, with the remaining 16 closing in 2013.
22 February 2006
AIB reports €1.7 billion profits
Banking group AIB have reported pre-tax profits of €1.706 billion in 2005, up from €1.37 billion. AIB Group Chief Executive Eugene Sheehy said: "Our 2005 performance reflects quality growth in all our main franchises. Strong customer demand continues to drive momentum and underpins our confidence in the outlook for 2006 and beyond.