Allied Irish Banks executive chairman David Hodgkinson expressed "deep regret" to shareholders for the loss of their investments at an extraordinary meeting this morning.

The meeting is being held to approve the Government recapitalisation that will leave the State with 99.8 per cent of the bank.

"We remain acutely conscious of the enormous erosion in shareholder value which has occurred and the real hardship for many shareholders brought about as a result," Mr Hodgkinson said.

"It has to be said yet again by people like me, so that we cannot forget, that serious mistakes were made in this bank which can't be allowed to happen again.

"The Government has had to put an enormous amount of taxpayers' money into AIB in order that we can help put things right both for our customers and the wider economy. So AIB exists today on the strength of the support of the Irish Government on behalf of taxpayers."

Mr Hodgkinson said that the bank was seeking shareholder approval for "the final action" in the recapitalisation of AIB and its newly acquired subsidiary, the EBS building society.

Shareholders are voting on the placing of €5 billion worth of new shares to the National Pensions Reserve Fund and a €1.6 billion contingent capital loan in addition to a State capital contribution to cover the balance of capital required to make up a €14.8 billion after a gain from inflicting losses on junior bondholders.

The bank is raising more than €2 billion from so-called burden-sharing with these bondholders in which losses of up to 90 per cent on their loans to the bank.

The Government's shareholding in the bank will rise from 93 per cent to 99.8 per cent to meet a higher capital target set by the Central Bank following the stress tests of the banks.

Mr Hodgkinson said the board of AIB recommended that shareholders vote in favour of the recapitalisation.