Allfirst declares it won't be sold

Allfirst has assured its customers and clients in the United States that AIB will not sell the Baltimore-based bank because of the loss of $691.2 million (€787.5 million) in foreign currency trading.

In response to a question posted on its website asking if AIB would sell the Baltimore-based bank because of losses incurred by trader Mr John Rusnak, Allfirst stated: "Assuredly, no." "AIB has confirmed its commitment to Allfirst," the bank said. "This issue is not about Allfirst as a core subsidiary. It is a one-time suspected fraud."

"AIB is fully supportive of our efforts to bring this matter to resolution, and remains committed to their investment in the USA."

Allfirst, which has 250 branches in Maryland and surrounding states, explained that what happened was "a very complex manipulation of control systems within treasury".

On the question of possible regulatory action against Allfirst, the bank stated: "We have kept all regulators fully informed and we will continue to work with them to resolve this issue. Right now, we don't know of any regulatory actions." Allfirst assured customers it will remain sound. "Every company sets aside a large percentage of its annual profits into a capital reserve which provides for the future growth and development of the organisation," it stated.

"This reserve also represents an important cushion against unforeseen and unexpected events. Allfirst has total capital in excess of $1.5 billion and continues to satisfy the criteria for being well capitalised under the rules and regulations of the Federal Reserve Board. The loss incurred from these events will be charged against our profits and will, therefore, have no impact on Allfirst customers' deposits. We are further supported by our parent company, Allied Irish Banks, p.l.c. (AIB), which has close to €7 billion (equivalent to more than $6 billion) in capital. As such, Allfirst has more than adequate liquidity and funding to continue to provide services to our customers."