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.

11 May 2009
Downturn 'Ending', Says Ulster Bank
Signs of economic improvement show that the worst of the economic downturn in Northern Ireland has passed. A new report from Ulster Bank suggests that, although NI's private sector has seen business activity fall sharply and at a much faster rate than the UK average, there are now signs of improvement.
26 July 2016
Other News In Brief
SDLP MLA Meets With BoI Reps To Discuss Branch Closures An SDLP MLA has met with representatives from the Bank of Ireland (BoI) to discuss their decision to close a number of branches in Northern Ireland. BoI announced the closure of eight branches last week.
20 May 2009
NI Economy To Grow In 2010
The local economy is showing signs of growth - but the results won't be apparent until 2010. According to the head of the University of Ulster's School of Economics, Mike Smith, the Northern Ireland economy would remain "fairly flat" during 2009 before moderate growth returned next year.
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.
10 August 2016
Bombardier To Bring Forward Over 90 Redundancies
Aerospace firm Bombardier is to bring forward over 90 redundancies it had planned to make in 2017. Bombardier said it will bring forward a total of 95 redundancies at its operation in Belfast. In February the firm said it was axing 1,080 posts over two years as part of global restructuring.
28 October 2011
Smaller Firms Banking On Global Advice
International business success stories will be shared with hundreds of small and medium-sized enterprises (SMEs) and aspiring entrepreneurs as part of a major events tour being organised by Ulster Bank in association with Small Business Can, an Ulster Bank initiative that allows thousands of other small businesses and entrepreneurs to communicate.
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.
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.
24 June 2016
Ulster Bank To Stop Belfast International Festival Funding
The Ulster Bank is to stop funding the Belfast International Festival after it takes place in October this year. Richard Donnan, Ulster Bank's Head of Northern Ireland, said: "At Ulster Bank, we're really proud of the work we've done to date with Richard and the whole team behind the Belfast Festival.