Allfirst will deliver in long term, says Quinn

Mr John Rusnak, the foreign exchange trader who lost €777 million at AIB's US subsidiary, Allfirst, will not be charged until the FBI completes its inquiry into the fraud, according to AIB chairman Mr Lochlann Quinn.

AIB's legal advisers have told the bank that Mr Rusnak is continuing to co-operate with the FBI inquiry. "The FBI is investigating everything he did and investigating the people he traded with. When this investigation is completed, he will be charged. This is what our lawyers have told us," he told shareholders at the bank's annual general meeting in Belfast.

Some questioned whether the fraud report AIB had commissioned would prejudice any criminal action against the dismissed trader or indeed whether he would ever be brought to trial. Mr Quinn vehemently defended the bank's claims that Mr Rusnak defrauded it of €777 million.

"Mr Rusnak did commit a fraud. That is factually correct. He falsified documents. The evidence is incontrovertible," he said.

The chairman said the fraud had not damaged the Allfirst franchise and it could yield returns for AIB shareholders in the future. "Profits are growing. I am satisfied it will continue in the long haul to deliver value to shareholders," he said.

Mr Quinn stressed that AIB's US investment was one of the most significant of all the European banks and signalled that it would remain part of the group. Many large shareholders have told AIB to leave the US, saying they want to see signs of significant progress on preparing the US bank for sale within a year.

After the meeting, AIB group chief executive Mr Michael Buckley indicated the bank did not plan to sell its US business in the short term but added that all issues of acquisitions of regional banks there had to be put aside for now. "All issues of acquisitions have been put away until we get this right. If we can achieve after-tax profits to the order of 8 per cent per annum, we would have a more solid base for future acquisitions."

Mr Quinn apologised to shareholders for the Allfirst disaster and reassured them what happened was not prevalent throughout AIB. "What happened was devastating and shouldn't have happened. I don't believe those problems exist anywhere else in the bank. It was an isolated pocket and is not symptomatic of the bank as a whole. We are committed to making profits but not at the expense of controls."

He also voiced his strongest opposition to a merger between AIB and Bank of Ireland stating the bank was only interested in competing with its rival in the Irish market. "We believe any such merger would be unacceptable on competition grounds and has not been and is not now on the agenda."

AIB's position was clear, he added. The bank would develop its business as an independent multinational financial services company.

"The focus of our growth strategy is not at all on merging AIB with any other company. It is clearly fixed on developing and successfully implementing a distinctive AIB customer proposition. We are interested in competing with Bank of Ireland, not in merging with it."

The merger proposition has been advanced by Bank of Ireland chief executive Mr Michael Soden as the best way to ensure that Irish- controlled financial institutions can maintain their independence and compete in Europe.