AIB bond move may net €1bn profit

AIB is leveraging the Government’s bank guarantees in a debt buyback strategy which could leave AIB with a net profit of close to €1 billion.

Bank of Ireland has already boosted its reserves by €1bn through the employment of a similar stratagem.

Originally both banks borrowed billions to fund property loans to Irish customers by issuing perpetual bonds. As the property bubble burst and the global banking crisis grew the value of these loan bonds crashed by as much as 65%.