AIB acted in an “underhand” manner in a bid to profit from an alleged fraudster’s multi-million pound property portfolio, a London court heard yesterday.

Achilleas Kallakis (44) is accused of defrauding AIB out of £740 million in property loans by using fake guarantees to obtain the money. His barrister claimed yesterday that Mr Kallakis had been treated unfairly by AIB as the bank sought to make a profit on the prestigious property portfolio he is alleged to have held.

Just before Mr Kallakis took the stand at Southwark Crown Court to begin his evidence, George Carter-Stephenson QC launched a ferocious broadside against AIB and HBOS, which also says Mr Kallakis defrauded it.

He claimed AIB had made £102 million from Mr Kallakis and his co-defendant Alexander Williams (44) by way of charges, including interest payments and arrangement fees.

He insisted that his client was a mere “negotiator” on behalf of the Hermitage Syndicated Trust, whose beneficiaries are said to be Mr Kallakis’s children. Mr Carter-Stephenson also accused AIB of having a “cosy deal” with property company Kish, which allowed it to sell Mr Kallakis’s property portfolio at a loss but later recouped profits.

Mr Carter-Stephenson added: “Knowing what he knows, he believes what they [AIB] did was underhand. It was a manipulation of the situation to their advantage.

“They acquired what in effect was a very valuable portfolio with assets they know they could sit on for some time and make profits from.

“Of course they, in a very cosy little deal with Kish, undersold, we would submit, that portfolio creating an artificial loss but with “clawback provision” in relation to later profits.

“This enabled them to claim from their insurance and then sit back and claim the profits.”

During his evidence, Mr Kallakis said he had met Mr Williams while studying economics and business at university in the late 1980s. The pair were later convicted of breaking a 700 year-old law in 1995 while selling heraldic titles of foreigners.

Mr Kallakis also said that he had changed his name from Stefanos Kollakis in a bid to “wipe the slate clean” soon after the court case.

Mr Kallakis and Mr Williams both deny conspiracy to defraud, forgery, fraud by false representation, money laundering and obtaining a money transfer by deception.